Flanking_In_A_Price_War

Flanking In A Price War Article Main Point Summary The article “Flanking in a Price War” discusses a pricing experiment that was conducted in the Quebec grocery industry. The experiment was initiated by a grocery chain in Quebec that was concerned about a possible price war between the major players in the market. The article introduces us to the four leading grocery retailers and provides us with some historical background on the industry. It primarily focuses on Steinberg Inc. who was the market leader until 1980 and had created heavy entry barriers to the industry through a strategy of price slashing. As a result, the market was reduced to four major players with Steinberg’s share declining into third place. The concern that Steinberg may initiate a price war in an effort to improve its position in the market led the president of IGA to seek help from US and Canadian academia to understand the sales response of different goods to price changes in order to develop the best pricing strategy. The experiment relied on the Bayesian theory and revealed that there were two categories of products, stock-up goods and non-stock-up goods, with different price sensitivities. Pricing Experiment Design The experiment was conducted price, market, steinberg, study, war, experiment, strategy, prices, share, stock-up, sales, products, pricing, grocery, cuts, competitors, percent, non-stock-up, iga, week, store, one, industry, goods, competition, major, leader, items, increase, competitive, changes, article, utility, two, timeframe