Given consumers’ sensitivity to price increases, some companies are somewhat hesitant to increase their prices in...

Given consumers’ sensitivity to price increases, some companies are somewhat hesitant to increase their prices in today’s market place opting to pursue other strategies. Discuss four alternate approaches that a company might consider to avoid increasing its prices, citing an appropriate example for each of the alternatives discussed.

Expert Solution

1. Cross Selling: The company can keep the product price low but they can push and sell other products with it to make more profits. Example: Selling coffee with cookies and cakes.

2. Up Selling: The company can sell the product at the same price but convince the customers to buy something expensive along with it. Example: Convincing the customers to buy a television along with a washing machine

3. Customer experience: The company can provide excellent service and improve the customer experience which will encourage the customers to keep visiting the shop, again and again, resulting in increased sales and revenue. Example: Hiring customer friendly salesperson and providing services like free television and internet in the shop to all the customers.

4. Product Quality: The company should not change the product quality just because they cannot increase the price. They still need to keep attracting the customers and they can do it by providing quality products. Example: McDonald's keep coming with new products but they do not increase the price. This makes the company a huge success in the market.

keosha answered 10 months ago

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