Examples of predatory pricing in the following topics:
-
- Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market.
- However, It is usually difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition.
- There must be substantial barriers to entry for new competitors for predatory pricing to succeed.
- Thus, they would not know predatory pricing is occurring.
- Low oil prices in the 1990's were considered a case of alleged predatory pricing.
-
- Anti-dumping duties: In international trade, dumping refers to a form of predatory pricing in which exported products are priced below the cost of production or below the price charged in the home market.
- Anti-dumping duties are usually extra taxes levied on the product to neutralize the predatory pricing and bring the price closer to the "normal value. "
-
- Common examples of this type of regulation include laws that control prices, wages, market entries, development approvals, pollution effects, employment for certain people in certain industries, standards of production for certain goods, the military forces, and services.
- Antitrust laws prohibit monopolization, attempted monopolization, agreements that restrain trade, anticompetitive mergers, and, in some circumstances, price discrimination in the sale of commodities.
- Large companies with huge cash reserves and large lines of credit can stifle competition by engaging in predatory pricing, in which they intentionally sell their products and services at a loss for a time, in order to force smaller competitors out of business.
- Afterwards, with no competition, these companies are free to consolidate control of an industry and charge whatever prices they desire.
- Even if competitors do shoulder these costs, monopolies will have ample warning and time in which to either buy out the competitor, engage in its own research, or return to predatory pricing long enough to eliminate the upstart business.
-
- Such firms are often referred to as "price makers. " In contrast, firms with limited to no market power are referred to as "price takers. "
- Some of the behaviors that firms with market power are accused of engaging in include predatory pricing, product tying, and creation of overcapacity or other barriers to entry .
- A monopoly, a price maker with market power, can raise prices and retain customers because the monopoly has no competitors.
- An oligopoly may also be a price maker with market power, as firms may be able to collude and control the market price or quantity demanded.
- A perfectly competitive firm, a price taker with no market power, cannot raise its price without losing its customers.
-
- A company must have ethical marketing policies to guide their pricing, advertising, research, and competitive strategies.
- Bait and switch is a form of fraud where customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a costlier product.
- Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.
- Identify the common ethical issues associated with products, pricing, promotion and placement within the marketing mix
-
- Offensive Strategy: This strategy aims to adopt a policy of "destroyer pricing" to preempt the entry of new firms or drive away existing competitors.
- Also known as predatory pricing, this strategy is useful when competitors or potential competitors cannot sustain equal or lower prices without losing money.
-
- A Progressive Republican, Roosevelt believed in government action to mitigate social evils, and as president, he denounced in 1908, "the representatives of predatory wealthâ as guilty of, "all forms of iniquity from the oppression of wage workers to unfair and unwholesome methods of crushing competition, and to defrauding the public by stock-jobbing and the manipulation of securities."
- Trusts increasingly became a central issue, as many feared that large corporations would impose monopolistic prices to defraud consumers and drive small, independent companies out.
- Instead, the Interstate Commerce Commission would control the prices that railroads could charge.
- After threatening the coal operators with intervention by federal troops, Roosevelt won their agreement to an arbitration of the dispute by a commission, which succeeded in stopping the strike, dropping coal prices, and retiring furnaces; the accord with J.P.
-
- Myxococcus xanthus colonies exist as a self-organized, predatory, saprotrophic, single-species biofilm called a swarm .
- This behavior facilitates predatory feeding, as the concentration of extracellular digestive enzymes secreted by the bacteria increases.
-
- Price discrimination is present in commerce when sellers adjust the price on the same product in order to make the most revenue possible.
- Second degree price discrimination: the price of a good or service varies according to the quantity demanded.
- By using price discrimination, the seller makes more revenue, even off of the price sensitive consumers.
- Premium pricing: uses price discrimination to price products higher than the marginal cost of production.
- Gender based prices: uses price discrimination based on gender.
-
- Competitive-based pricing occurs when a company sets a price for its good based on what competitors are selling a similar product for.
- Competitive-based pricing, or market-oriented pricing, involves setting a price based upon analysis and research compiled from the target market .
- For instance, if the competitors are pricing their products at a lower price, then it's up to them to either price their goods at a higher or lower price, all depending on what the company wants to achieve.
- One advantage of competitive-based pricing is that it avoids price competition that can damage the company.
- Status-quo pricing, also known as competition pricing, involves maintaining existing prices or basing prices on what other firms are charging.