Some times it is hard to tell what the “real” price is for a product. Food manufacturers have traditionally shrunk the product size and kept the price level in response to cost increases. Many airline tickets are sold on-line after comparison shopping so airlines are doing everything possible to keep the listed price low while loading on extras to compensate for skyrocketing fuel prices. Fuel surcharges and fees for checking bags, food, drinks, window seats, speaking with live agents, etc. all make comparisons between carriers more difficult, but not impossible, online. There is an opportunity for fast programmer to develop and market a tool which includes all the extra costs for true ticket comparison shopping, but that is a topic for a different blog.
Warranties or other bundled services may have been eliminated or reduced while the list price appears to be the same. Is the product a “new, improved” version that is actually smaller? Are rivals’ small, but frequent price increases adding up to significant change?
All these are methods used by companies to mask price increases. While dips in the economy usually result in price cuts, the tremendous cost pressures from skyrocketing fuel increases in 2008 are forcing firms to quietly raise prices.
Check the details of competitors’ pricing and product attributes to determine what is really going on. Then you can formulate the most effective response to your rivals’ actions.
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