which is an example of predatory pricing answers.com

Price elasticity, or people’s sensitivity to price changes, affects the demand for products. Figuring out how consumers will respond to prices involves judgment as well as research. Will customers buy the product, given its price? Or will they believe the value is not equal to the cost and choose an alternative or decide they can do without the product or service? Equally important is how much buyers are willing to pay for the offering. In addition to gathering data on the size of markets, companies must try to determine how price sensitive customers are. How will buyers respond? Three important factors are whether the buyers perceive the product offers value, how many buyers there are, and how sensitive they are to changes in price. Next we look at each of the factors and what they entail. Organizations must understand buyers, competitors, the economic conditions, and political regulations in other markets before they can compete successfully. If a company plans to sell its products or services in international markets, research on the factors for each market must be analyzed before setting prices. Those factors include the offering’s costs, the demand, the customers whose needs it is designed to meet, the external environment-such as the competition, the economy, and government regulations-and other aspects of the marketing mix, such as the nature of the offering, the current stage of its product life cycle, and its promotion and distribution.

A firm also has to look at a myriad of other factors before setting its prices. Learn how to calculate the breakeven point.Understand why companies must conduct research before setting prices in international markets.Understand the factors that affect a firm’s pricing decisions.

Which is an example of predatory pricing answers.com