Companies that undercost products will most likely lose market share. True or False?
I assume you mean under price products. Costs are costs and you can not undercut them it is called fraud.
Under pricing products is a strategy acompany will use to gain market share. Usually this is done with a product that is a completely new concept not a product addressing a market already established. SONY did this with their walkman and other products because no one knew what the market would be. Once a market was established the price leveled off that the company enjoyed normal profits. Never try this if you are introducing a product which there is a competitor already selling a similar product. You will most likely lose the price war. |
