What is the Boston Consulting Group (BCG) Matrix? The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio. The BCG Matrix is one of the most popular portfolio analysis methods. It classifies a firm’s…
What is Loss Leader Pricing? A loss leader pricing strategy, a term common in marketing, refers to an aggressive pricing strategy in which a store prices its goods below cost to stimulate sales of other, profitable goods. With such a pricing strategy, a business is selling its goods at a loss to lure customer traffic…
What is Penetration Pricing? Penetration pricing is a pricing strategy that is used to quickly gain market share by setting an initially low price to entice customers to purchase. This pricing strategy is generally used by new entrants into a market. An extreme form of penetration pricing is called predatory pricing. Rationale Behind Penetration Pricing…
What is Guerrilla Marketing? Guerrilla marketing refers to an advertising strategy that focuses on using low-cost marketing techniques to generate maximum exposure for a product or service. The term “guerrilla marketing” was used in the 1984 book, “Guerrilla Advertising”, by American business writer Jay Conrad Levinson. Due to the emergence of the internet, guerrilla marketing…
What is Price Skimming? Price skimming, also known as skim pricing, is a pricing strategy in which a firm charges a high initial price and then gradually lowers the price to attract more price-sensitive customers. The pricing strategy is usually used by a first mover who faces little to no competition. Price skimming is not…
What is Price Discrimination? Price discrimination refers to a pricing strategy that charges consumers different prices for identical goods or services. Different Types of Price Discrimination 1. First Degree Price Discrimination Also known as perfect price discrimination, first-degree price discrimination involves charging consumers the maximum price that they are willing to pay for a good…
What is Price Fixing? Price fixing refers to an agreement between market participants to collectively raise, lower, or stabilize prizes to control supply and demand. The practice benefits the individuals or firms involved in setting the price and hurts consumers and firms on the receiving end. Why is Price Fixing Illegal? Under Canadian and United…
What is a Shark Repellent? Shark repellent refers to measures employed by a company to lock out hostile takeover attempts. The measures may be periodic or continuous efforts exerted by management to make special amendments to its bylaws. The bylaws become active when a takeover attempt is made public to the company’s management and shareholders….
What is an Automatic Stabilizer? The term automatic stabilizer refers to a fiscal policy formulation that is designed as an immediate response to fluctuations in the economic activity of a certain country. The normal operation of the tools is such that no additional authorization is required by policymakers or the governments. The measures get automatically…
What is the Automated Customer Account Transfer Service (ACATS)? The Automated Customer Account Service (ACATS) is an electronic system in the U.S. that allows the smooth transfer of financial securities of a customer from the trading account of one institution to the trading account at another. The institutions are usually brokerage firms or banks. Many…
