? Price wars are bad,especially with high
fixed costs.
? They reduce current profits and erode
customers’ perception of product quality.
? Price wars are not inevitable,For example,
the French and the Germans fight every
fifty years but not every year.
? But collusion is illegal.
? Of course predatory pricing is illegal too.
? Price wars are bad,especially with high
fixed costs.
? They reduce current profits and erode
customers’ perception of product quality.
? Price wars are not inevitable,For example,
the French and the Germans fight every
fifty years but not every year.
? But collusion is illegal.
? Of course predatory pricing is illegal too.
? If you differentiate by bundling; the design
of the bundle should depend on your
resources.
? Bundle with your strong resources –unless
you risk destroying them in the process
? Use advertising to create additional
differentiation,still based on your
resources.
? Price discrimination is a very common
practice
? Some versions are illegal
? Effective 3rddegree price discrimination
can make a lot of money in a lot of
industries
– airlines,classes,times
– grocery coupons
– quality-tiered products