1.1) The marketing manager is making a mistake with a pricing strategy that sets the price for the antique style computer desk below comparable product pricing. Although he states that he is doing this to increase the quantity they sell, he is not taking several factors into consideration. First, if they are selling a desk made of high quality materials and that has several special features, the price should reflect that. However, most importantly, he is not taking into account the style of the product and that this is the type of product that is a one time purchase. This is not a generic laminated type desk – this is a specific style that may not appeal to the mass market (antique, roll top). Many people would not buy this product, even with a low price because of the style. Additionally, once a computer desk is purchased, it is not likely a consumer would make another purchase of the same product for quite some time.
2.1) If charged under the Robinson-Patman Act, a seller has three defense options. The first option involves price. If there is a manufacturing or quality discount a company can sell at a different price to different customers. The second option involves market conditions. A different price to different customers is allowed under certain conditions such as if the product is perishable or the seller is closing their business. The final legitimate defense to the Robinson-Patman Act is relates to competition. If a competitor quotes an undercut price then the seller can lower their price as well.
3.5) The information age is changing pricing in two main ways. First, because of a consumer’s ability to purchase many products over the internet that they previously had to purchase from a retailer, many middlemen have been cut out of the market channel. This usually has a direct impact of pricing. Next, because consumers have a much easier time in comparing product features and pricing on the internet, many companies have been forced to become much more competitive with their pricing.
5.1) This is a tough question to answer because I would use different pricing strategies during a recession to gain or maintain market share based on what the product or service I was selling. I think that service industries often times have the best advantage during a recession because it is easiest to bundle and/or unbundled services over products. You can work with compatible service providers to increase your offerings to consumers or scale back the current services offered.
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