• Competitors’ reaction to price change: A company should also pay attention to its competi-
tors’ reaction to price change. If the competitors change price in the same direction, it only leads
to price war, and the company cannot gain from price change. Further, a fi nancially stronger
competitor can practice price cut more aggressively for a longer period. Competitors’ reaction
will be more when buyers are well informed about the market, products are homogeneous and a
limited number of companies are operating in the market.
7.10 PRICING OF SERVICES
It is a global phenomenon that the service sector is ...
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