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6:25 PM Mon Nov 15 maintain the status quo. * This 1s especially true in industries that depend on price b stability, such as the airline industry and retail gasoline. L= E—d i * If a business can maintain its . profit or market share simply by i > ‘ matching the competition, it H will do so. * A competitor that shakes things up by deeply discounting prices to gain market share canNELSON . . comatimaoac ctawrt a nrico ywar Pricing Objective — Survival or Liquidation * A final common pricing objective is survival or liquidation. * This usually means that the company will cut its price to attract customers, even if it is below the break-even price for the business or below the unit cost of the product. » Obviously such a goal cannot be pursued on a long-term basis, or the business will fail. » But it can be a legitimate way to increase company cash flow in the short term, particularly when the company has a large amount of inventory to sell. * This strategy can also be employed for underperforming product lines, either as a last-ditch effort to gain customers for the product or as a liquidation strategy before discontinuing the product. 2% NELSON