CLEP Marketing

Category - Pricing

A local Wal-Mart store urges its customers to bring competitors’ advertisements for certain products sold at the store, and they would beat those prices. This is an example of
  1. Price underselling
  2. Price competition
  3. Price gouging
  4. Horizontal pricing
  5. Vertical pricing
Explanation
Answer: B - A local Wal-Mart store urges its customers to bring competitors’ advertisements for certain products sold at the store, and they would beat those prices. This is an example of price competition. Price competition occurs when an organization focuses on pricing strategy by beating or matching competitors’ pricing. The goal of price competition is to set up the company as the product’s low-cost seller. In this case, the Wal-Mart store is aiming to beat the competitors at their own price.
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