ENGLISH

Termination of Price Wars: A Signaling Approach

By Michael Bungert (auth.)

Book information

Publisher
Deutscher Universitätsverlag
Year
2003
ISBN
978-3-8244-7956-6, 978-3-322-81625-2
DOI
10.1007/978-3-322-81625-2
Language
english
Format
PDF
Filesize
14 MB (14624856 bytes)
Edition
1
Pages
240\257
Orientation
yes
Scanned
yes
Time added
2013-08-01 04:00:00
Marketing

Description

Price competition frequently degenerates into its most devastating form: a price war. As the general consensus is that price wars substantially damage the firms involved a new approach is necessary to put an end to these conflicts. Michael Bungert investigates the possibility to terminate (non-beneficial) price wars through appropriate signals. In an experiment, he analyzes the effect of different types of signals such as switch-blocking intent, reciprocity, co-operation, weakness, and hostility on the price reaction behaviour of a competitor. The author shows the consequences of marketing moves such as individual refunding guarantees, coupons, image advertising, price-matching guarantees, verbal statements and unilateral price increase for the generation of the mentioned signals. He demonstrates that all signal types show a considerable effect on the probability of a co-operative price reaction.

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