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G4_[CO]-ch6 Rules ((More Winners (Household have much more new accounts…

- - - - less incentive for any credit-card issuer to compete on price
  - - - list price:$21,000
        
        $21,000
        
        $21,000
        
        Win-Win
        
        $19,000(2000 rebate)
        
        $23,000
  - - - prospective buyers
        
        gets customers off the sidelines
  - - - treat your own customers bester than your rival's customers
        
        lower price
        
        your own customers
        
        higher price
        
        rival's customers
- - - - Chrysler's Every Day Low Pricing(EDLP) Policies
        
        Loyal customer base
  - - - Cash-back offers, dealer discounts end-of-year rebates, and other incentive programs
  - - - Creates a win-win pricing dynamic
- - - - follow other people’s rules
      - count on other to follow your rules
  - - - you lose power
- - - - laws govern transactions all the players in the economy
  - - - roles of antitrust laws
      - determined what types of contracts are legal or not
      - consult with legal counsel to better understand which contract to use and avoid
- - - - WRONG
    - - some customers recognize they are poor at negotiate
      - MFC don't always lead to a higher prices
      - they don't realize how an MFC changes the game
      - customer are concerned with if the cost is higher than competitors
    - - pros
        
        1.make you a tougher negotiator
        
        2.reduces your customers' incentive to bargain
      - cons
        
        1.make it easier for a rival to target one of your customers
        
        2.makes it harder for you to target one of your rival's customers
    - - pros
        
        1.allow you to benefit any better deal subsequently offered to other customers
        
        ensure that you're not at a cost disadvantage relative to rivals
        
        eliminates the risk of looking bad if other customers strike better deals
      - cons
        
        1.when others have MFCs, it's better for you to get a special deal.
- - - - Purchase commodity inputs
        
        Pros
        
        Reduces risk to your supplier
        
        Reduces a rival's incentive
        
        Con
        
        Increases severity of price war