Valuing Benefits: Weighted Average or Economic Impact?

Because the exchange value approach examines the focal product against its next nearest competitor from the viewpoint of a specific market segment, it creates a focused picture of how an offering is likely to be evaluated by that specific segment. If more segments and competitors are to be considered, more models of the Exchange Value to Customer are needed. This leads to better and more accurate pricing on a segment-by-segment basis.

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Rules of Retailing and Changing

Prof. Haskett defines the “wheel of retailing” as the concept where retailers enter the market through low-price strategies to build market share. With the high market share, the retailer would shift its strategy from attracting new customers to increasing profit margins through higher pricing. In implementing the higher pricing strategy, the retailer opens spaced for a new lower price retailer to come into the market as the wheel turns.

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Strategic Movements: July 2017

What will Gillette do? As a starter, they cut prices by 12%. Good for consumers (and society overall), bad for investors. Competition’s role is to drive prices down and quality up. This is part of the reason private capitalism is better than state-controlled enterprise.

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