Business, 09.11.2020 19:10 adayisenga

What are the risks and benefits of implementing a penetration pricing policy as compared to a competitive pricing policy?

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Penetration pricing is a pricing strategy where a company charges less than its competitors in order to entice its competitors' customers to patronise them instead.

Competitive pricing on the other hand will see a company charging the same price as its competitors.

Benefits of using Penetration pricing over Competitive

Reduce competition - If the company engaging in penetration pricing is large enough with more influence in the market, charging less than competitors might lead to competitors leaving the market as the prices will be too meagre for them to cover costs. Market Dominance - using penetration pricing can lead to customers moving from the competitors to the company using penetration pricing thereby giving that company market dominance. Economies of scale - Penetration pricing allows the company to sell more quantity of its product which means that it will have to produce more and this will reduce average costs for the company.

Risks involved

Price War - There is a risk of a price war if a company uses penetration pricing. A price war happens when a company reduces its prices and their competitors react by reducing their own prices as well. It might led to a situation where this continues until all the companies are making significant losses. Brand Image damage - Cheaper products are usually perceived as having lower quality. Reducing prices might see customers believing instead that the brand is poor and so they may avoid it. Attracts low loyalty - The customers gained through this strategies most often have little brand loyalty and when a better deal comes than the one they are being offered in that moment, they will leave.

Answer from: Quest

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'

Answer from: Quest

match the scenarios with terms related to financial aid.

pell grant

student loan

merit-based scholarship

richard is one of the leading college basketball players in the state of florida. he also maintains a good academic record. looking at his talent and potential, furman university offers to bear the expenses for his college education.

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anita wants to pursue a certificate program in sports nutrition. to pay for the course, she borrows money by filing the fafsa.

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nathan comes from a low-income household. he wants to pursue an undergraduate degree in marketing. he receives financial aid covering 50 percent of his college expenses. nathan does not have to pay back this amount.

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