A firm produces highly substitute goods can adopt which pricing strate

1.	A firm produces highly substitute goods can adopt which pricing strategies
Answer» Substitute goods: These are goods or products which act as a substitute in place of another similar product. For example, butter and margarine, or Pepsi and Coke. There are multiple PRICING strategies which may be used for the selling of substitute goods. Like the USE of penetration pricing, economic pricing or PSYCHOLOGICAL pricing. However, the most EFFECTIVE ONE is the penetration pricing strategy. In this pricing strategy the price is lower, to attract customers. At least initially. Since your the seller of substitute goods, then if your product is less than the demanded good, customers will get attracted to you. Example, Coke and Pepsi taste the same, so I'm your not a brand loyal customer then its easy to reduce price of Pepsi and make you shift your demand from Coke to Pepsi.

A firm produces highly substitute goods can adopt which pricing strategies

Answer»

Substitute goods:

These are goods or products which act as a substitute in place of another similar product. For example, butter and margarine, or Pepsi and Coke.

There are multiple PRICING strategies which may be used for the selling of substitute goods. Like the USE of penetration pricing, economic pricing or PSYCHOLOGICAL pricing. However, the most EFFECTIVE ONE is the penetration pricing strategy.

In this pricing strategy the price is lower, to attract customers. At least initially. Since your the seller of substitute goods, then if your product is less than the demanded good, customers will get attracted to you. Example, Coke and Pepsi taste the same, so I'm your not a brand loyal customer then its easy to reduce price of Pepsi and make you shift your demand from Coke to Pepsi.

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