The price of a product or service plays an important role in how it sells. Producers and retailers practice ethical pricing strategies to make profits without deceiving competitors or consumers. Nevertheless, competitors` prices, convenience, availability and other factors influence consumers` impression of fair prices. This strategy is most often observed in the tech industry, as some consumers are willing to pay a higher price for the latest gadgets. Apple is a great example of this, as prices drop in the months following a release and new iterations take place within six to 12 months. Like price discrimination, this practice is not illegal, but if it is too obvious and not tested enough, it can trigger an unfortunate public relations reaction. Apple had a lot of flack because it shortened its production cycle on the latest iPad and immediately lowered the prices of older models. Producers also have the advantage of a truly open market when regulating their materials and processes. However, this could lead to immoral activities (use of cheap or dangerous goods, deception about benefits, etc.) that are considered harmful to society as a whole.

It`s important to note that, despite this change, few pricing policies are monitored by the government, largely because the customer isn`t sure who broke a pricing rule until the customer sees the evidence. For example, although prices are excessively low to keep competitors out of the market, it is impossible to prove that the price reductions were not the result of competitive prices. In addition, many laws must limit the intentions of actions and not the results. Therefore, ethics and price legality exist in a grey area that oscillates between ethical and unethical. Legal or ethical? While this type of pricing can lose customers who end up paying higher amounts, it is a legal practice that is carried out by companies at all levels. However, due to ethical concerns, many companies will work with consumers who are currently paying to drive down prices, but not all. Finally, these are predatory prices. Predatory prices are the prices of a product that is inferior to competition, in the hope of pushing that competition into bankruptcy. Pricing strategies generally do not reach the level of predation unless they are so low that they are below the cost of manufacturing. Or they are made with the aim of harming competition. Simply offering a slightly lower price or a good deal is not a predatory price. The government spun up the company in 1982, resulting in new competing telephone companies.

It is also illegal to set prices or distribute markets among competitors in order to undermine competition. An alleged monopoly exists when an enterprise sets prices for the entire market. Legal or ethical? – This is not an illegal pricing strategy, unless it falls into predatory or undercutted pricing issues. Undercutting occurs when a company constantly sets prices between competitors to ensure that they make sales and that their competition does not. Laws prevent companies from using this tactic. It`s hard to implement perfect, 100% ethical pricing for your entire range, especially if you`re not sure what ethical or unethical pricing are. What is Yo-Yo Price? Yo-yo prices are when a company rates a product higher for a limited time – usually when supply is also low – and then lowers prices and increases supply immediately afterwards. This is often a tactic to increase sales at that higher price. The study focuses on various legal and ethical aspects of quotation offerings, especially when marketers enter global markets. The contribution of the study lies in the fact that an in-depth qualitative and conceptual analysis of the literature on corporate pricing strategies in global markets and the ethical issues associated with them was carried out. An ethical pricing strategy goes beyond simple compliance with the law. Similarly, not all unethical pricing strategies are fraudulent or illegal.

Ethical decisions are sometimes difficult because there is no set line for good and bad moral decisions. As with many ethical issues in business, we need to step back and consider our decisions as a larger part of the business world and set ethical standards for ourselves. The potential blow to consumers is the reason why horizontal prices are illegal, meaning that companies at the same level of the supply chain (among other things) cannot agree on a target, maximum or minimum price. This form of fraud can be prosecuted under the Sherman AntiTrust Act. However, the Supreme Court has ruled that vertical pricing is allowed. For example, wholesalers can limit the amount retailers charge for clothing. Put yourself in your customers` shoes if you ever have doubts about whether a price is ethical or unethical.