Question

The General Manager of ‘Sharma Udyog Limited' Mr Vikas Sharma called a meeting of the concerned officials to fix the price of different products of the company. In the meeting it was unanimously decided that the company would make an attempt at obtaining market share leadership. In this context, it was also decided that this could be possible only when the existing prices were reduced a little. Present in the meeting, one of the senior members said that their products were such that if their prices were changed a little, there would be a big change in their demand and that this was not the situation to fix high prices, so they would have to keep the prices low. Another member, laid stress on providing the facility of After-Sale-Service, even though the prices may be increased a little. Last of all, the Chairperson of the meeting, Mr Sharma also gave a suggestion. He told that along with other things, they would have to keep in mind the prices of their competitors also.
Identify the factor of fixation of leadership prices with which is concerned the obtaining of market share

leadership.

(a) Utility and demand

(c) Extent of competition in the market.

(b) Pricing objectives

(d) Marketing methods used​

Answer 1

Answer:

Utility and demand

option A

Answer 2

Many factors affect the determination of the price of a product

Explanation:

Some important factors in this regard are discussed below:-

(i) Product cost:- The cost determines the minimum level or minimum price at which the product can be sold.

(ii) Utility and demand:- The utility provided by the product and the intensity of the buyer's demand determine the upper limit of the price the buyer would be willing to pay.

(iii) Expansion of competition in the market

Price is also affected by the nature and degree of competition.