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CHAPTER 6
CHAPTER 6

... overcapacity. They drop their prices, increase advertising and sales promotions, and increase their R&D budgets to find better products. As a result, profits decrease, weaker competitors leave the market and only the well-established competitors remain. ...
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Pricing strategies

A business can use a variety of pricing strategies when selling a product or service. The price can be set to maximize profitability for each unit sold or from the market overall. It can be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market. Businesses may benefit from lowering or raising prices, depending on the needs and behaviors of customers and clients in the particular market. Finding the right pricing strategy is an important element in running a successful business.
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