Question

michelle owns the largest florist shop in her town. each week, she orders a truckload of flowers from the flower wholesaler. the other two florists in town order only one-third as many flowers. because michelle's order fills the delivery truck, the wholesaler sells flowers to her at a lower price than the other florists must pay. how will this situation impact potential new entrants?

Answer 1

The new florists will be discouraged from entering the market.

As already there are setup shops present with the good customers so the new florist will be discouraged from entering the market because of the difficulty of competing on cost.

Cost competition:

After considering rivals, a product's price is set using a technique called "competition-based pricing." Marketers use a variety of pricing strategies, including value-based pricing, cost-plus pricing, and penetration pricing. One of these pricing methods, competitive pricing strategies or competitiveness-based pricing, is also one of these and is a little bit more well-known than the others.

Always keep in mind that the quality and cost of your product will determine how quickly your firm grows. A minor adjustment to your pricing tactics can increase your company's profitability by multiples. A marketer continually strives to make it better because of this.

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