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.

Solutions

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 4 months ago

Next > < Previous

Related Solutions

1. Which of the following would increase prices for U.S. consumers? a. a tariff on...

1. Which of the following would increase prices for U.S. consumers? a. a tariff on imported automobiles b. an automobile import quota c. a foreign government subsidizing auto production d. (a) and (b) above only 2. The larger the MPC: a. the less powerful changes in individual taxes will be in changing aggregate demand. b. the smaller the multiplier. c. the smaller the effect of a given increase in government purchases on...

Suppose that the money supply increases in the short run, this will increase prices according to...

Suppose that the money supply increases in the short run, this will increase prices according to __________. Group of answer choices both the short run Phillips curve and the aggregate demand and aggregate supply model neither the short run Phillips curve not the aggregate demand and aggregate supply model the short run Phillips curve but not the aggregate demand and aggregate the aggregate demand and aggregate supply model but not the short Run Phillips curve

If the price of a product increases: Multiple Choice the price increase has no effect on...

If the price of a product increases: Multiple Choice the price increase has no effect on the producer surplus. the consumer surplus will not change. the consumer surplus will increase. the producer surplus will increase.

Suppose that the number of sellers in a market increases and an increase in price of...

Suppose that the number of sellers in a market increases and an increase in price of a substitute good occurs. What would we expect to happen in the market?

Rent control is an example of a price ceiling. Price ceilings keep prices low for consumers....

Rent control is an example of a price ceiling. Price ceilings keep prices low for consumers. We can clearly see that sellers (landlords in this case) are worse off. Consider if there is an argument to be made that consumers are worse off, too. a) After watching the Seinfeld video clip, discuss how some consumers are made better off and some are not in a rent-control situation. b) What kinds of rationing mechanisms would develop to help allocate the few...

There are three consumers in the market for widgets. Their inverse demand function, given the prices...

There are three consumers in the market for widgets. Their inverse demand function, given the prices of the rest of goods and the consumers’ income, are ?1(?) = 10−?, ?2(?) = 10−2?, ?3(?) = 10−3?, Where ? represents number of widgets. Obtain the market demand function for widgets.

Consider the demand for apples. If the prices of a substitute good(bananas) increases and the price...

Consider the demand for apples. If the prices of a substitute good(bananas) increases and the price of a complement good (apple pie) increases, can you tell for sure what will happen to the demand for apples? Why or why not? Illustrate your answer with a graph.

An increase in the price of ground beef - A. increases the quantity demanded of ground...

An increase in the price of ground beef - A. increases the quantity demanded of ground beef. B. decreases the demand for ground beef. C. increases the demand for chicken, a substitute for ground beef. I believe that the correct answer is B, but I need to write a big explanation for why its is correct.

Imports increase the domestic supply and lead to lower prices for consumers. Exports reduce the domestic...

Imports increase the domestic supply and lead to lower prices for consumers. Exports reduce the domestic supply and push price upward. The net effect of international trade is an expansion in total output and higher income levels for both trading partners (law of comparative advantages). "The United States is suffering from an excess of imports. Cheap foreign products are driving American firms out of business and leaving the U.S. economy in shambles." Evaluate this view. Review absolute and comparative advantages....

Companies try to make a profit by pricing their products and services at price consumers will...

Companies try to make a profit by pricing their products and services at price consumers will buy. For some companies, they offer lower prices to increase customer value. Rather than take the time to come up with a creative marketing mix that does a better job of meeting the needs of some target market, they just imitate competitors and make the head-to-head competition (and thus price pressure) in the market worse. These are the kind of people who then look...

Subjects