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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
Karishma,
Thanks for your explanations;
it is in fact a paradox scenario;otherwise, how would someone want to spend more when shops
are farther apart?

So,
D, the OA
says customers believe more in price-matching policies when shops are closer.
No need to visit the next door shop.
However, with far shops, the price-matching policies are believed NOT to represent the true price.
As such, customers travel far to purchase what might be a price advantage for them.
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
I have a doubt.....
What i understand from the post of karishma that there is a paradox and we need to solve.... Pls help me clear my doubt

The argument states that there is an advt. by a shop that it will return the difference in price if found lower than theirs in other store......The customers don't verify the products whose cost is low but verify the cost of higher priced goods. This is behaviour of customer is unlikely......

We need to explain this unusual behaviour of the customer in terms of " Price matching policies..."

Assume that the customers are aware that all the shops keep their price on lower priced goods same but not for higher priced good.

Hence keeping this in mind customer look for store where they can get the same higher priced product at little bit lower cost comparatively.

Now with this pre thinking answer choices are scanned i feel that C and D are contenders.

C. force nearby competitor stores to reduce their prices in order to retain a market share

I think C clearly states what i have stated in my explanation.

Pls explain whether my assumption is wrong.
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
1
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Archit143 wrote:
I have a doubt.....
What i understand from the post of karishma that there is a paradox and we need to solve.... Pls help me clear my doubt

The argument states that there is an advt. by a shop that it will return the difference in price if found lower than theirs in other store......The customers don't verify the products whose cost is low but verify the cost of higher priced goods. This is behaviour of customer is unlikely......

We need to explain this unusual behaviour of the customer in terms of " Price matching policies..."

Assume that the customers are aware that all the shops keep their price on lower priced goods same but not for higher priced good.

Hence keeping this in mind customer look for store where they can get the same higher priced product at little bit lower cost comparatively.

Now with this pre thinking answer choices are scanned i feel that C and D are contenders.

C. force nearby competitor stores to reduce their prices in order to retain a market share

I think C clearly states what i have stated in my explanation.

Pls explain whether my assumption is wrong.

Not sure, but it is likely that you may have mixed this question up with some other question.

the argument doesnt deal with consumer behaviour wrt lower/higher priced goods, but it deals with consumer behaviour wrt clustered(closer) shops/not clustered shops.

Ans D it is and rightly so.
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
Expert Reply
Archit143 wrote:
I have a doubt.....
What i understand from the post of karishma that there is a paradox and we need to solve.... Pls help me clear my doubt

The argument states that there is an advt. by a shop that it will return the difference in price if found lower than theirs in other store......The customers don't verify the products whose cost is low but verify the cost of higher priced goods. This is behaviour of customer is unlikely......



No! The customers don't verify the cost when the shops are closely located i.e. it is easy to verify (the cost to verify is low - they don't have to travel much to verify). They verify when the shops are located far from each other i.e. they have to travel a lot to verify i.e. the cost to verify is high. This is unexpected, isn't it. This is the paradox you need to resolve. See if the argument makes sense now.
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
why E is incorrect? E shares the same idea with D
Ah, i see it now, because E does not guarantee that for high-price purchases, customers will make more searches.
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
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Re: Many retailers advertise price-matching policies, such as, “In the unl [#permalink]
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