THE PRICING:
Understanding How Pricing Works
Pure economics or some corporate whim in the mix?
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MARKET SHARE
HIGH MARKUPS
Strong business through more sales and larger customer-base flocking for reasonable pricing.
High profits through hiked prices beyond cost and at loss of “cheaper-paying” customer base.
There is something to be said about a corporation’s pricing power. For most, it’s a delicate balance between raising markups (retail prices) and loosing economy class customer base; and, raising profits through higher sales and a larger share of the market (more customers than competitors). When corporations grow big enough, the power play changes. All factors below increase a company’s flexibility and whim in raising prices when the opportunity arises:
1.
Corporate Giants with huge economical &/or political powers. Inelastic Demand market for products that people must purchase.
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2.
Monopoly due to little to no competing suppliers of the same product.
3.
