A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
-How could lowering prices to capture a higher share of the market be a strategic advantage to a company?
A)Lowering prices will reduce the company's overall profits,whether they have the largest market share or not.
B)Lowering prices will allow a company to force its competitors to sell at a lower price that they can afford to,which will drive them into bankruptcy.
C)A company with the largest share of the market does not have to comply with the same safety regulations and production controls that other companies do.
D)A company with the largest share of the market is seen as the leader so customers think of it as the default and require less sales effort to close a sale.
E)A company with the largest share of the market can cut costs and raise prices without the public noticing or switching to competitors.

Question

Quizplus · Accepted Answer

Lowering prices can be a strategic advantage because it can help a company capture a larger market share. This is because lower prices can make the product more accessible to a wider range of customers, including those who may have been hesitant to purchase it at a higher price point. In addition, a company with a larger market share is often seen as the industry leader, which can make it easier to close sales and build customer loyalty.

A Designer Releases Her Fall Line of Handbags,including One That