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Thursday, June 01, 2006


How to fix price to a commodity? This question exposed its most complicated form as we are busy solving one of the economics assignments.
The very mechanism of this concept is based on not more than a few straightforward concepts of supply and demand. But once all these simple concepts combine together they form a very complex picture of this subject which we call “Pricing”.
How does an entrant into the market make his pricing decisions in the presence of an incumbent….how does this incumbent reacts to the strategies of the entrant… Will the incumbent decide to join hands with the entrant or will this process turn into a bitter price war…If this turns into a price war, then who is the likely winner and why…..How long is the winner likely to sustain his presence….Is there any referee to monitor this game of “price war”…..and numerous other questions immediately enters into play when the topic of pricing is under discussion.
Interestingly, pricing is not under the independent domain of any single MBA topic. It holds as much importance to economists as it holds to marketing managers. And that is what we are doing now…learning the concept of “pricing” in the context of economics and again learning this concept in the context of marketing….. But this doesnot make life easier.

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