Respuesta :
Answer:
I would suggest my team to price our email product also, at a price slightly lower than competitor's price, i.e < $5
Explanation:
Price setting can be done, based on two pricing strategies:
- Price Penetration : Setting lower price initially to capture maximum market share
- Price Skimming : Setting higher price initially to collect maximum revenue soon. Such firms have high brand image due to their 'status symbolisation' (ostentation effect)
If competitor starts charging $5 for the email product : We can either adopt complete price penetration strategy, by keeping our product still free & trying to capture maximum market share. However, 'free' good might create a public perception of the good being inferior quality (ostentation effect). On other hand, we can use price skimming strategy & leverage the opportunity to earn high revenues. However, this might lead to huge loss of market share.
So, a good option could be : To start charging price, for preventing us from that 'free inferior good' image. Also, charging slightly lower than competitors price would make - us earn decent revenues & good market share as well.
My recommendation if competitor charges monthly fee on email product : To start charging Variable Cost
Competitor has started charging fixed monthly fee. So, we should also start charging price. This would increase perceived value of our product in the market, among consumers.
However, It would be recommended to keep the price variable according to the email product service provided. This would give us a competitive edge in the market.
To learn more, refer https://brainly.com/question/24907033?referrer=searchResults
