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Using a competitive pricing strategy
Most markets that you have considered entering have some established pricing.
Competitive pricing compares alternative products and services and sets prices
accordingly. For example, the following are comparative prices for PCs.
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Compaq
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CTX
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Compaq
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Hewlett-Packard
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|
Processor
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233
Mhz
|
266
Mhz
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233
Mhz
|
200
Mhz
|
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Memory
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48
Mb
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32
Mb
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32
Mb
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32
Mb
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Hard drive
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4.0
Gb
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4.3
Gb
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3.2
Gb
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2.1
Gb
|
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CD-ROM
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24X
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24X
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20X
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16X
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Modem
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56K
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56K
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56K
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56K
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Monitor
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13.2”
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13.8”
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No
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No
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Printer
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Yes
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Yes
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No
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No
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Zip Drive
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Yes
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No
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No
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No
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Price
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$1,349.70
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$1,299.99
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$949.99
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$799.99
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From this table, you can see that the computer with the least amount of
features has the lowest price. However, there is not quite as much distinction
between the two most expensive computers. While the Compaq does offer a Zip
drive and 16 Mb more of memory, its processor is slower than the CTX and its
monitor is smaller.
By using competitive pricing, you can establish price ranges for products and
services. Additionally, you can compare features, warranties and service levels
to determine premium and discount levels relative to competing products and
services.
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