Due to Wal-Mart’s superior ability to order inventory on demand, they are in a position to also meet customer demand better than their competitors. This is especially true with fad products, because they are only popular for a limited amount of time when they become unpopular they can leave massive amounts of inventory that nobody wants to purchase. Due to Wal-Mart’s superior supply chain and their technology they are better able to avoid carrying an oversupply of fad items, and regular items as well.
The future of an organisation which adopts such a strategy potentially lies with its consumers. If a consumer continues to purchase from the organisation when prices increase over time, then the strategy has been successful. However, if consumers only choose to retain their loyalty to a given brand whilst a penetration pricing strategy is in action, once product prices have been increased further down the line consumers could switch; proving the strategy to be unsuccessful. Organisations anticipate that consum... ... middle of paper ... ... with each other. A decrease in price will be offset with a rise in demand and vice versa, leaving TE unchanged.
Which one is better Buy Now: Wal-Mart Stores, Inc. vs. Costco Wholesale Corporation? Costco is doing better, but Wal-Mart stock is much inexpensive. Which one is a better buy right now? Here are two different retailers with two different strategies. The alternative norms are that Costco operations are entirely based on the warehouse model and membership fees offer customer more of an economic advantage to customers than Wal-Mart everyday low prices and flexible payment with suppliers.
Furthermore, duoplies are more effective on the short term, as over a long term, prices often become more elastic as consumers finds another alternative for the product. Ho... ... middle of paper ... ...utting down prices to attract comsumers will increase demand of consumers as consumers are paying less for groceries. However, Woolworth and Coles are a using their market power of keeping a constant competitive environment amongst other supermarkets such as Aldi and Costco. Advantages of duopoly -The advantages of duopoly in supermarkets is it portrays close competitions for other supermarkets. -The competition of prices is direct to other producers such as Woolworth and Coles offering better prices to its comsumers.
The existence of search cost makes firms to charge different prices, where customers of one firm are not aware of other firms (or they do not seek information). This is known as price dispersion which is associated with incomplete information. Consumers who do not buy from the cheapest seller are not aware of other cheaper options. Suppose there are two types of customers in a market – one group is well informed and will always buy from firm with the cheapest price, the other group uninformed and will acquire information at some costs per additional search. Then some of the uninformed customers will search sequentially and stop if the cost will exceed their expected gain.
It is the situation when supplier sell the same product at different prices depends on the quantity purchased, not only it is inefficient but also anti competitive because the smaller companies may not receive the same prices as the bigger companies. It is also called quantity discount, it reduces consumer surplus and more common than 1st degree. 3RD DEGREE PRICE DISCRIMINATION: Third type of price discrimination is a commonest type means charging a price to different groups of consumers. The goods or services must not be transferable in this, the market is inefficient because of the dead weight loss in other words separation of market reduces dead weight loss and the separation of market enables the firm to increases profits. For examples: there are two segments of market students and alumni.
Importance of setting the Right Fair Price Pricing strategies are important criteria which affects the overall success of the company. The price set is simply not a financial issue but a marketing issue that determines how the product is positioned and how the market (customers) perceives the product. Pricing is a challenge with different implications at any stage of the business cycle, whether you are setting the prices for the first time, raising or lowering existing prices, or determining how to react to an unsteady economic climate. Overprice and you will risk losing your business to your competitors. Under price and you may inadvertently devalue your offerings.
The majority of us buy these substitutes because there the same as the name brands but at the fraction of the cost. The threat of substitutes of a these products and services to industries can be impactful to the industry/ company’s success and can shape the competitive make-up of the industry. Industries profit margin suffers due to the number of substitutes that are available; this is because many customers choose to buy the substitute items in place of the industry’s items. Having customers straying away from the industries products just makes things more competitive while it decreases profit potential. For example how many different brands of cereal do we see in the supermarket?
The reason being is that when firm try to profit maximises in the short run then this will attract new entrants into the market to take some of this profit away from the existing firm. As more competition is attracted then the new prices will force the prices and the profit down. This is the reason why it is only possible to make normal profit in the long run. The threat of potential entrants into the industry means that existing firms will behave competitively, even if the firm is a monopoly. The key assumption of a contestable market is that it gives the firms the ability to enter and exit the market.
Communication during the promoting should be in very good way, so that customers can easily understand about products values. Customer dealing and service is another major part because handling the customers in a good manner improves the image of the company and product as well. TASK-4 Q-4.1 Ans- there are two types of market research’s Primary research- it always takes more time and it is very expensive. It meets the particular needs which is very helpful. Secondary research- it is very cheaper and always takes a less time.