e) Price competition

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7 Terms

1
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  • the methods of price competition


  • price war

  • predatory pricing

  • limit pricing


2
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  • price war


  • repeatedly lowering prices to increase market share and drive competitors out of business


3
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  • predatory pricing


  • lowering prices below the production cost when a new firms enters the market

  • then raising prices back to the profit maximising level when they leave the market


4
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  • limit pricing


  • lowering prices below the profit maximising level but above the cost of production to deter hit-and-run competition


5
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  • the methods of non-price competition


  • loyalty rewards

  • after-sales care


6
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  • examples of loyalty rewards


  • tiered programs

  • paid subscriptions

  • points-based rewards


7
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  • examples of after-sales care


  • help desk support

  • warranties/returns

  • product maintenance