Chapter

Pricing and Positioning, 1

John Kay

in Foundations of Corporate Success

Published in print April 1995 | ISBN: 9780198289883
Published online November 2003 | e-ISBN: 9780191718205 | DOI: http://dx.doi.org/10.1093/019828988X.003.0014
 Pricing and Positioning, 1

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The type of the competitive market in which firms operate will depend on the implicit rules that govern the behaviour of the companies. When there are long‐term relational contracts, there is the opportunity for prices to reflect the value of products to the customers as well as the cost of the product. Accordingly, the less stable the competitive environment, the greater the degree to which prices will be determined by cost rather than value.

Keywords: airlines; competitive strategy; cost; game theory; market segmentation; price discrimination; pricing; products; relational contracts; value

Chapter.  5843 words.  Illustrated.

Subjects: Microeconomics

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