Podcast
Questions and Answers
What is the strategy Unilever used to sell products to poor consumers?
What is the strategy Unilever used to sell products to poor consumers?
Price reductions can lead to price wars among competitors.
Price reductions can lead to price wars among competitors.
True
What can lead a company to initiate price increases?
What can lead a company to initiate price increases?
Rising costs due to inflation or excess demand.
To attract cash-strapped consumers, Unilever developed ______ packages.
To attract cash-strapped consumers, Unilever developed ______ packages.
Signup and view all the answers
Which of the following is NOT a situation that could lead to price cuts?
Which of the following is NOT a situation that could lead to price cuts?
Signup and view all the answers
What is a recommended technique for companies when increasing prices?
What is a recommended technique for companies when increasing prices?
Signup and view all the answers
¿Qué puede resultar de las reducciones de precios en industrias con alta capacidad?
¿Qué puede resultar de las reducciones de precios en industrias con alta capacidad?
Signup and view all the answers
Cuál de las siguientes opciones NO es una razón por la que una empresa podría considerar aumentar sus precios?
Cuál de las siguientes opciones NO es una razón por la que una empresa podría considerar aumentar sus precios?
Signup and view all the answers
¿Cuál es un resultado de un aumento del 1% en el precio, si el margen de ganancia de la empresa es del 3%?
¿Cuál es un resultado de un aumento del 1% en el precio, si el margen de ganancia de la empresa es del 3%?
Signup and view all the answers
Qué estrategia utilizó Unilever para hacer sus productos accesibles a los consumidores más pobres?
Qué estrategia utilizó Unilever para hacer sus productos accesibles a los consumidores más pobres?
Signup and view all the answers
¿Cómo deberían las empresas manejar a los clientes insatisfechos durante un aumento de precios?
¿Cómo deberían las empresas manejar a los clientes insatisfechos durante un aumento de precios?
Signup and view all the answers
Cuál de las siguientes situaciones podría llevar a una empresa a considerar recortes de precios?
Cuál de las siguientes situaciones podría llevar a una empresa a considerar recortes de precios?
Signup and view all the answers
¿Cuál es una de las razones que puede llevar a un aumento de precios en una empresa?
¿Cuál es una de las razones que puede llevar a un aumento de precios en una empresa?
Signup and view all the answers
Cuál es un problema único que enfrentan las empresas en la fijación de precios internacionales?
Cuál es un problema único que enfrentan las empresas en la fijación de precios internacionales?
Signup and view all the answers
Según el enfoque de Lenovo, ¿cuál es una estrategia utilizada para aumentar la participación en el mercado en países en desarrollo?
Según el enfoque de Lenovo, ¿cuál es una estrategia utilizada para aumentar la participación en el mercado en países en desarrollo?
Signup and view all the answers
Qué enfoque adoptó Unilever para adaptarse a las condiciones económicas en mercados en desarrollo?
Qué enfoque adoptó Unilever para adaptarse a las condiciones económicas en mercados en desarrollo?
Signup and view all the answers
Study Notes
Pricing Strategies
- Companies can change their pricing strategies in response to factors like cost increases, economic downturns, or competitor price changes.
- Companies may also adjust their pricing strategies for international markets, considering additional costs and local market conditions.
- Unilever has successfully targeted low-income consumers in developing countries by offering smaller, affordable product packages.
Price Changes
- Initiating price cuts may be considered due to factors like excess capacity, declining demand, or a weak economy.
- Price cuts can lead to price wars, as competitors try to protect their market share.
- Initiating price increases can boost profits significantly, but should be implemented carefully.
- Price increases are often driven by inflationary pressures or excess demand.
- Companies should communicate price increases clearly to customers, providing explanations and demonstrating fairness.
Avoiding Price Increase Backlash
- Companies should avoid appearing speculative when increasing prices, as customers can perceive this negatively.
- Companies can mitigate price increase backlash by:
- Offering clear explanations for price rises.
- Exploring ways to manage rising costs without raising prices, such as finding cost-effective production methods.
- Reducing product features, packaging, or services to maintain affordability.
Initiating Price Changes
- Companies may need to initiate price changes or respond to competitor price changes.
- Companies may initiate price cuts due to excess capacity, falling demand, or a weak economy.
- Price cuts can lead to price wars.
- Companies can also cut prices to dominate the market through lower costs.
- Successful price increases can significantly boost profits.
- Price increases can be driven by inflation or excess demand.
- Companies should avoid appearing speculative when increasing prices.
Buyer Reactions to Price Changes
- Buyers may interpret price changes differently.
- Price increases may be perceived as a sign of exclusivity or quality improvement, or as a sign of greed.
- Price cuts may be perceived as a better deal or as a sign of reduced quality.
- Price changes, especially cuts, can impact how buyers perceive a brand.
Competitor Reactions to Price Changes
- Companies should consider competitor reactions to price changes.
- Competitors are more likely to react when there are few companies involved, the product is homogenous, and buyers are well-informed.
- Companies must anticipate how competitors will react to price changes.
Responses to Price Changes
- Companies can respond to competitor price changes by maintaining their price, cutting their price, increasing perceived value, or launching a fighting brand.
- Maintaining the price might lead to a loss of market share.
- Cutting prices can reduce profits in the short term.
- Increasing perceived value can be done through communication or product improvement.
- Launching a fighting brand can attract budget buyers but may tarnish the image of the main brand.
Public Policy and Pricing
- Price competition is a cornerstone of the free market economy.
- Companies are not always free to set any price they want.
- Federal, state, and local laws govern price-setting.
- Pharmaceutical companies must balance development costs and profit goals with consumer needs.
- The Sherman Act, Clayton Act, and Robinson-Patman Act aim to prevent monopolies and control business practices.
- Public policy issues in price-setting include price discrimination, predatory pricing, resale price maintenance, and price fixing.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the various pricing strategies companies utilize in response to economic factors and competition. This quiz covers both the initiation of price cuts and increases, including their potential impacts such as price wars and customer communication. Test your knowledge on how businesses navigate pricing in different markets.
