Pricing Case Study Example | Topics and Well Written Essays - 750 words

Pricing - Case Study Example The kind of retailing done on the Sainsbury’s website may not reflect the kind of perfect competition that online commentators had believed would happen. The products offered at Sainsbury’s are priced differently from local retailer’s shops. Some are more expensive while others are cheaper than in offline shops. The kinds of products sold differ almost daily. However, there are some products that have been on offer for quite a while. The consumers who buy from the website are not necessarily the same ones who frequent the off-line retail shops. The website also offers value added services which may not be offered in other websites selling the same kinds of products. For instance, in the Food and drinks section customers may have a look at free recipes provided by the website. The website can be summed up as the one stop online shop for anything that one might want. Perfect competition is the term that is used to describe the kind of market in which no market players can control the market or set prices for homogenous products. The principles of perfect competition are considered by many to be strict as they have to meet the following criteria: In a perfectly competitive market, there has to be a large supplier base. However, each of these suppliers has to have an insignificant market share. In this regard, it becomes too hard for the firm or supplier to be able to control price through its own supply network. Sainsbury’s is a single supplier of a large variety of products. The online company has a huge supply network that makes it easy to control its own products. The same case is replicated in many online retail businesses which have a large supply and customer base. This gives them the power to comfortably set their own pricing standards without having to rely on the pricing of the overall market. A perfect competitive market cannot happen in such an environment where the market players are not price takers, but price setters