How Should a company respond to competitor's price-change?

1. DEVELOPING
PRICING
STRATEGIES
AND PROGRAMS
Presentation by Srujan Dasari

2. HOW
SHOULD ACOMPANY RESPOND
TOACOMPETITORS’
PRICE-CHANGE?

3. Best response varies with Situation
HOW SHOULD A FIRM RESPOND TO A COMPETITORS’ PRICE-CUT?
InMarkets with HOMOGENEITY,
a Firm should search for ways to ENHANCEits AUGMENTEDPRODUCT

4. InMarkets with NON-HOMOGENEITY,
One needs to consider manyIssues
Why did the Competitor change the price?
Does the competitor plan to make price change permanent ortemporary?
What will happen tocompany’s market share andprofitif it doesn’t respond?
What arethe competitor’s andother firm’s responses likely toeach possible situation?

5. DISCLAIMER
Created by Srujan Dasari, IIT Kharagpur,
during an internship by
Prof. Sameer Mathur, IIM Lucknow.
www.IIMInternship.com