A company introduces a new product in the market. The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors charge. What advantage would the company enjoy because of the strategy it proposes to follow?
A) If the market involves a lot of brand loyalty, the company would command the largest share in the market.
B) Low expenditure on market research would help it to detect important environmental changes at a lower cost.
C) If the market is highly fragmented the company would avail greater opportunities to attract a large segment of customers.
D) It makes them well-positioned to withstand price competition from rivals.
E) The need for high sales volume would require low upfront investments in production and/or distribution capacity.

Question

Quizplus · Accepted Answer

By keeping prices lower than competitors, the company is better positioned to withstand price competition from rivals, as it can attract price-sensitive customers and potentially increase its market share.

A Company Introduces a New Product in the Market