The price reduction may be based on the following reasons:
The overcapacity of enterprises, under the strong competitive pressure, the cost of enterprises is lower than that of competitors, and the production cost of the industry has been greatly reduced due to technological progress.
Enterprises can raise prices under the following circumstances:
Due to inflation, the products of enterprises are in short supply, and the packaging, style and performance of products have been improved.
The active price adjustment of enterprises will have an impact on consumers, competitors and middlemen.
Customer's reaction. Consumers are generally more sensitive to the price changes of commodities with higher value and higher purchase frequency, but less sensitive to the price changes of small commodities with lower value and lower purchase frequency. In addition, the response to price reduction or price increase also depends on the specific commodity and market conditions.
The reaction of competitors. There are two ways to understand it, one is to collect relevant information, and the other is to study the past price response strategy by statistical analysis.