6 Questions
Why do companies engage in shrinkflation and skimpflation?
To boost or maintain profit margins
What can happen to profit margins when production costs rise?
They are negatively impacted
How is market share calculated?
By dividing a company's sales by the total sales of the industry over a period
What do companies lacking strong pricing power do when faced with rising production costs?
Reduce the weight, volume, or quantity of products
In a competitive industry, why might companies avoid raising prices?
To prevent customers from switching to other brands
What does market share represent for a company in relation to its competitors?
Percentage of industry sales earned by the company over a period
Learn about the tactics of shrinkflation and skimpflation that companies use to boost or maintain profit margins amid rising production costs. Understand how these strategies are implemented in response to higher costs of raw materials or labor.
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