36. Woolworths and Coles often compete on price. For example Coles began a 'price war' selling milk at $1 per litre, an offer that Woolworths quickly matched. The retailers are aware that the cost of their electricity and water, for example, are not negotiable like the costs of many of the products that they buy such as milk and bread. Coles and Woolworths managers understand that:

Question

BlackTom AI · Accepted Answer

The question describes Woolworths and Coles engaging in price competition, noting that some costs (like electricity and water) are non-negotiable, while product costs (milk, bread) can be matched or adjusted. It then asks what managers understand in this context.

Option a: 'price competition is undesirable for a seller unless it has a cost advantage over competitors.' This statement is too absolute. Price competition can be desirable for a seller that has cost advantages or efficient operations, and even without a broad cost advantage, firms may engage in price competition to gain market share or deter entrants. In other words, it’s not inherently undesirable; the outcome depends on relative costs and strategic goals.

Option b: 'an organisation choosing to compete on aspects other than price has greater power to decide on the profit margin per unit sold for its products.' This aligns with typical strategic reasoning: differentiating on non-price factors (quality, service, branding) reduces price elasticity and can give a firm more control over margins, since customers may pay a premium for non-price value.

Option c: 'some government owned monopolies price products below cost.' While there are instances of government involvement in pricing, this statement is a generalization that doesn’t directly reflect how private retailers like Coles and Woolworths think about cost pass-through or non-negotiable input costs in a competitive market. It introduces a separate concept not necessary to the Woolworths/Coles price competition scenario described.

Option d: 'all of the options listed.' To choose this, every previous option would need to be accurate. Since option a is not universally correct as stated, option d would be incorrect.

Option e: 'both a and b.' This option would be correct if both a and b were accurate descriptions. Given the nuanced view of price competition, while b is solid, a’s blanket claim is overly strong. Therefore, selecting 'both a and b' would rely on treating a as correct, which undermines precision.

In summary, the statement in option b captures the core strategic idea that competing on non-price attributes can grant greater control over margins, while option a’s claim is too categorical and not universally valid in real-world pricing strategy. Options c and d extend beyond the scope or conflict with the given context, making them less appropriate interpretations of the managers’ understanding in this scenario.

类似问题

The general price range of the products offered by a retailer helps define the store's image.

What advantage is there for a company to offer products at prices below actual market value?

Setting the price for a new product is less difficult when other products like it are already being sold. Why is this true?

Becky tells her sales representatives their goal is to generate at least a 15 percent return on investment for all the computer desks they sell. Becky is using a________ pricing strategy.

Macy's, Kohl's, and JCPenney practice a retailing pricing strategy called "high-low pricing." Which of the following correctly describes high-low pricing?

Macy's, Kohl's, and JCPenney practice a retailing pricing strategy called "high-low pricing." Which of the following correctly describes high-low pricing?

The low-ball strategy often aligns with sales-oriented pricing objectives.

In order to set prices for new products, firms should __.

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单