...sell their products at recommended prices, by not allowing the retailers/distributors to sell below a certain price. These actions amount to the practice of minimum resale price maintenance, and are prohibited as they often render other retailers/distributors as uncompetitive in the free market. Is the Actions of Trek in recommending/fixing a retail price prohibited by the Act? The bicycle shops’ response in failing to offer you a discounted price, and only being prepared to offer you the lowest price possible of R20 000.00 amounts to a restrictive vertical practice which is prohibited in s 5 (1) of the Competition Act 89 of 1998 (Hereafter ‘the Act’). The bicycle shops are prohibited from solely relying on a minimum price which is fixed by Trek, as this amounts to an agreement between the parties which substantially prevents or lessens the competition in the market. An agreement with such an effect is prohibited by s 5(1) of the Act. More specifically, the issue deals with the practice of the minimum resale price maintenance which is explicitly prohibited in s 5 (2) of the Act, unless certain conditions are satisfied in s 3 (a) and (b) of the Act. The prohibition in s 5(2) of the Act was applied in following cases: The Competition Commission v Rainbow Farms (Pty) Ltd. The issue in this case was that the manufacturer/supplier addressed a letter to the stockists, requiring the stockists to sell their product (bagged animal feed) at a price stipulated in the supply agreement...
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...inferior products and artificially inflated prices for the consumer and is at times accomplished through unlawful collusion between competitors. A fair and open market where businesses compete in a non-monopolistic environment brings economic efficiency as businesses are encouraged to find more efficient methods of production stay in the market. Inefficient firms that fail to understand consumer needs, eventually lose in the market. If open market competition was nonexistent, cartels and monopolies would be free to distort the allocation of society’s resources for economic profit in the long run. This would result in economic loss to consumers as well as competitive harm to the economy. In the United States, the basic federal antitrust laws are: The Sherman Act of 1890, the Clayton Act (1914) and the Federal Trade Commission Act of 1914. The Sherman Act prohibits the restraint of trade and the creation of monopolies and is an important part of economic legislation in the United States. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids or engage in other competitive activity. Corporations or individuals in violation of the Sherman Act face large fines and/or imprisonment and must make restitution to the consumers for overcharges. The Clayton Act of 1914 is a supplement to the Sherman Anti-trust act. It deals with specific types of restraints including exclusive arrangements, tie-in sales, price discrimination and mergers and acquisitions...
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...credit cards: $50 * Liability for lost ATM or Debit cards. Errors in billing. Fair Credit Reporting Act * Notification if denied credit or insurance on the basis of a credit report * On written request credit agency must Protection for debtors: The Fair Debt Collections Practices Act * This law place limits on what the professional debt collector can do when trying to collect money from you The Sherman Act of 1890: Two major parts * Sec. 1: restraint of trade * A. Per se violation * B. Rule of reason: factors… * Purpose of agreement * Power to achieve purpose * Horizontal restraint * Price fixing * Group boycott * Division of markets * Trade associations (OK) * Can’t use that organization to price fix, can’t set your prices * Vertical restraints (rule of reason) * Territorial...
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...Who Enforces the Antitrust Laws? The antitrust laws are enforced by both public and private parties. A. Government Enforcement The United States Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC”) share responsibility for investigation and litigation of cases under the Sherman Act; and, review potentially anticompetitive mergers under the Clayton Act. There is not a formal system by which the DOJ and the FTC divide enforcement responsibilities, the agencies devote resources to particular industries where they have investigated or litigated in the past. Typically the DOJ will review mergers in transportation industries, such as airlines or railroads, as well as the telecommunications industry. The FTC focuses its enforcement responsibility in the oil and gas, pharmaceutical, and health care industries. State attorneys general have authority to enforce federal and state antitrust laws. States investigating a matter arising under the federal antitrust laws will jointly investigate with either the DOJ or the FTC, or may conduct a separate investigation. Individuals or businesses that violate antitrust laws are subject to civil penalties that vary by state per violation for individuals, and vary by state per violation for corporations. In addition, state attorneys general have authority to seek restitution on behalf of the citizens of their states as a result of violations of either the federal or state antitrust laws. Some states allow Attorneys...
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...Marketing, Advertising, & Product Safety 1.-the nature of advertising lotteries -they are a monopoly without competitors so they only have 2 strategies (1) recruit new players and (2) make existing players spend more -they chose second option to play into peoples gambling addictions -targeted lower income groups and were deceiving with their message by presenting only winning awards and not how much people lose -target poor because they have the most to gain and restrictions would deprive them of life changing opportunities -DECEPTION What did I learn about the case presentation? We learn that the marketing of lotteries is deceptive. A lottery has its own benefit and disadvantage that is selling hope and regressive form of taxation. The advertising of lotteries only focus on the maximum reward and it may attract consumers to buy lotteries who believes that lotteries would help them to become rich. The marketing of lotteries targeted most players with low educational experience. It will make the poor people more suffer rather than make them more rich or some sort of way out of their poor life. - What did I learn about myself? In our opinion, lottery is bad because it depends on the luck. If we want to gain something we must do our best and put some efforts. For me, buying lotteries maybe is one way to make you become rich. But why don’t we depend our own effort to become rich. - What are my thoughts about the issues discussed in tutorial? The advertisements of lotteries...
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...BUS4003 Retail and Channel Management Merchandising Management in Retailing: Vendors, retailers, customers Dr. Kenneth K. Kwong Department of Marketing and Management Week 9 Merchandise Management • Merchandise management is a process by which a retailer attempts to – offer the right quantity of the right merchandise – in the right place at the right time and – meet the company’s financial goals or profit objectives • Retailers need to be in touch with and anticipate what customers want to buy (sensitive to changes in the market trend) but are also able to analyze sales data continually and make appropriate adjustments in prices and the inventory level Develop an assortment plan Determine appropriate inventory level & product availability Buy merchandise Monitor & evaluate performance & make adjustment Forecast category sales Allocate merchandise for stores Develop a plan for managing inventory Have to balance the interests of both vendors, retailers, customers Merchandise Management • A merchandise category is an assortment of items that customers see as substitutes for one another (the depth of merchandise) – different favors, tastes & brand names of the same product (beverages) – vendors & retailers may define their own categories different in functions or product attributes and consumer behaviors – shampoos vs. conditioners (personal care products), paper towels (paper products) vs. detergents (cleaning aids) (manufacturers...
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...in competition analysis in June 2013. This document contains an executive summary of that debate and the documents from the meeting: an analytical note by the OECD staff and written submissions: Australia, Canada, Chile, the European Union, Indonesia, Japan, Mexico, Portugal, United Kingdom, Ukraine, United States and BIAC. A note by Theodore Voorhees Jr. as well as a detailed summary of the discussion are also included. Competition policy is just as concerned with quality as it is with prices. While the importance of quality is undisputed and issues about quality are mentioned pervasively in competition agency guidelines and court decisions, there is no widely-agreed framework for analysing it which often renders its treatment superficial. There are a number of reasons why in practice, courts and competition authorities rarely analyse quality effects as rigorously as they analyse price effects. First, quality is a subjective concept and therefore much harder to define and measure than prices. In addition, microeconomic theory offers little help in predicting how changes in the level of competition in a market will affect quality and it is usually up to empirical analysis to determine how quality will change in response to varying degrees of competition in the context of particular markets. Given difficulties in terms of the evaluation of quality factors, particularly in quantitative assessment, competition agencies end up using qualitative tools such as customer surveys and interviews...
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...Downstream competition between an upstream supplier and an independent downstream firm by Yaron Yehezkel* Preliminary and incomplete March, 2003 Abstract: I consider an upstream supplier that supplies an input to an independent downstream firm and in addition sells the final product to consumers. I find that the upstream supplier cannot implement the monopoly outcome without imposing maximum resale price maintenance (RPM). RPM increases social welfare if consumers’ valuation for the final product of the downstream firm is high, and decreases social welfare otherwise. When the downstream firm is privately informed about the demand it faces, entry into the downstream market serves as a countervailing incentive that allows the upstream supplier to reduce the information rents. Consequently, asymmetric information induces the upstream supplier to enter the downstream market even if entry is not profitable under full information. Keywords: dual distribution, two-part tariff, resale price maintenance, information rents, countervailing incentive JEL Classification Numbers: L41, L42, D82 * I thank Koresh Galil, Asaf Ravkai, Yossi Spiegel, Manuel Trajtenberg, Marisa Trajterman and seminar percipients at Tel Aviv University for helpful comments. * Tel Aviv University, Ramat Aviv, Tel Aviv, 69978, Israel. Email: . 2 1. Introduction Upstream suppliers often adopt a dual distribution system whereby they not only sell their products to retailers but also enter the downstream...
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...practices. With anti-trust laws in place we are then warranted a since of security from unfair and anti-competitive business practices, unreasonable trade, and price discrimination. As though anything new that is introduced, laws and or regulations when newly introduced can become the product of skepticism. Typically the judgmental ears question the new laws purpose and what influence it will have, even though these new laws may be intended to foster fair and or competitive business practices. Although most of us do not recognize their value, anti-trust laws affect our daily lives in a multiplicity of ways. In 1890 Congress ordained the Sherman Antitrust Act, a law designed to restore competition and free enterprise by breaking up monopolies. This Act July 2. 1890 states the following: “This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.” The novel purpose for Sherman’s Act was to protect consumers from big business that was exercising immoral means to raise the prices of their product falsely, for example producing too few goods to help meet the consumers needs thereby driving up the products value and price. The government has throughout the years introduced new laws to help protect both the trade industry and consumers. In 1914 Congress passed two more laws that...
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...To answer the question of whether the networks’ (Visa and MasterCard) rules barring member banks from issuing cards on the rival networks were illegal restraints of trade under the Sherman Act, and in what way these rules harmed competition, we need to pay attention to several details. First, under Section 1 of the Sherman Act “every contract, combination in the form of trust or otherwise, or conspiracy, in restraints of trade or commerce among the several States, or wit foreign nations, is hereby declared to be illegal and is felony punishable by a fine and/or imprisonment”. On one hand, Visa, MasterCard, American Express and Discovery are the four major credit- and charge-card networks in the United States. This makes the credit card industry highly concentrated, meaning that a small number of firms control a large percentage of market sales. Although Visa and MasterCard are joint ventures and they bar member banks from issuing cards on rival networks, they still compete against each other. On top of that, Visa and MasterCard may argue that even though the rules that they established with member banks hurt their competitors (American Express and Discovery), it doesn’t necessarily harm competition. Amex and Discovery themselves issue cards to customers, thereby staying in the market. Also, the agreement can be considered a vertical restraint of trade. Vertical restraint is any restraint on the trade created by agreements between firms at different levels. While in case of...
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...Comparable Uncontrolled Price (CUP) Method * The CUP method is ideal only if comparable products are available, or if reasonably accurate adjustments can be made to eliminate material product differences. Other methods will have to be considered if material product differences cannot be adjusted to give a reliable measure of an arm’s length price. * The CUP method is the most direct way of ascertaining an arm’s length price. It involves the direct price comparison for the transaction of a similar product between independent parties. * Comparability Analysis * An uncontrolled transaction is comparable to a controlled transaction for purposes of the CUP method if one of the following conditions is met: * None of the differences (if any) between the transactions being compared or between the enterprises undertaking those transactions could materially affect the price in the open market; or * Reasonably accurate adjustments can be made to eliminate the material effects of such differences. * An MNE using the CUP method to determine its transfer price must first identify all the differences between its product and that of the independent manufacturer. The MNE must then determine whether these differences have a material effect on the price, and adjust the price of products sold by the independent manufacturer to reflect these differences, to arrive at an arm’s length price. A comparability analysis under the CUP method should consider amongst...
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...0904010036657516538947 $39.99 Online Ticket July Sale TYPE: General PURCHASER: LOPEZ, MARIO PRICE: $44.14 CONFIRMATION # 242610559 TICKET #0904010036657516538947 PURCHASE DATE: 07/14/2015 PLU # 10029020 PAYMENT METHOD: Visa DESCRIPTION INSTRUCTIONS One Day admission ticket valid through July 31, 2015 Valid one day now 7/31/15. Skip the ticket booths! Present this ticket at the turnstiles. TERMS OF USE AND REFUNDS Valid only on specified regular operating days during the 2015 season. One ticket, voucher or season pass per person. No cancellations, refunds, rainchecks or exchanges; will not be replaced if lost, stolen or unused. May not be copied or resold and may be used only once. Duplication will result in revocation without refund and ejection. To request a name change, purchaser must accompany the new Guest, present photo ID and ticket/voucher at Guest Relations. Ticket or season pass voucher not valid at other parks or during private parties. Operating dates, hours, prices and policies subject to change without notice. May not be combined with any other offers or discounts. Some special events may require an additional charge. Availability of rides, shows and attractions are subject to change without notice. A ticket or pass is a revocable license and may be confiscated with no refund of purchase price. Violation of park rules will result in expulsion. A copy of park rules is available upon request. Conduct that is disorderly...
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...only annual payments, what spot rates are imbedded in these prices? First, we need to find the Discount Factors: Bond A: 〖DF〗_1*$100=$93.46 Bond B: 〖DF〗_1*$4+〖DF〗_2*$104=$94.92 Bond C: 〖DF〗_1*$8+〖DF〗_2*$8+〖DF〗_3*$108=$103.64 〖DF〗_1=93.46/100=0.9346 〖DF〗_2=((94.92-(0.9346*4)))/104=0.8767 〖DF〗_3=((103.64-(0.9346*8)-(0.8767*8)))/108=0.8255 Since 〖 DF〗_t=1/〖(1+r_t)〗^t , we have r_t=(1/〖DF〗_t )^(1⁄t)-1. Then solving for r1, r2 and r3 we get: r_1=0.069976≅0.070 r_2=0.068008≅0.068 r_3=0.066009≅0.066 So the spot rates are: Bond A = 7%, Bond B = 6.8% and Bond C = 6.6%. (b) What forward rates are embedded in these prices? The formula for forward rates is: f_t=〖(1+r_t)〗^t/〖(1+r_(t-1))〗^(t-1) -1=〖DF〗_(t-1)/〖DF〗_t -1 Plugging in the discount factors from (a) we get the forward rates: f_1=1/〖DF〗_1 -1=1/0.9346-1=0.069976≅7.00% f_2=〖DF〗_1/〖DF〗_2 -1=0.9346/0.8767-1=0.066043≅6.60% f_3=〖DF〗_2/〖DF〗_3 -1=0.8767/0.8255-1=0.062023≅6.20% (c) What should the price of a 3-year bond with a face value of $100 and a 6% annual coupon be? We calculate the bond price by discounting the annual cash flows by the discount factors from (a): P=〖DF〗_1*〖CF〗_1+〖DF〗_2*〖CF〗_2+〖DF〗_3*〖CF〗_3 P=0.9346*$6+0.8767*$6+0.8255*106 P=$98.37 (d) A 3-year bond with a face value of $100 and a 4% annual coupon is trading at $95.00. Show that this bond is mispriced by showing how you would take advantage of its price. In doing so, make sure that your arbitrage profits are realized...
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...We plan to utilize this fixed asset for the next 10 years, with a resale price of Tk. 10 lacs, with an annual depreciation of Tk. 9 lacs (10%), which we have calculated by {(Cost-Resale Value)/(No. of useful life)}. The depreciable cost of this asset was found by subtracting the cost of the car by the resale value, which gives us the opportunity to spread the total depreciable cost of Tk. 90 lacs over a period of the number of years we are planning to hold, which equals to 10 years. Table 1 Computation | | End of year | Year | Depreciable Cost(a) in Tk. | Depreciation Rate(b) | Annual Depreciation Expense(a*b) in Tk. | Accumulated Depreciation in Tk. | Book Value in Tk. | 2012 | 9000000 | 10% | 900000 | 900000 | 9100000 | 2013 | 9000000 | 10% | 900000 | 1800000 | 8200000 | 2014 | 9000000 | 10% | 900000 | 2700000 | 7300000 | 2015 | 9000000 | 10% | 900000 | 3600000 | 6400000 | 2016 | 9000000 | 10% | 900000 | 4500000 | 5500000 | 2017 | 9000000 | 10% | 900000 | 5400000 | 4600000 | 2018 | 9000000 | 10% | 900000 | 6300000 | 3700000 | 2019 | 9000000 | 10% | 900000 | 7200000 | 2800000 | 2020 | 9000000 | 10% | 900000 | 8100000 | 1900000 | 2021 | 9000000 | 10% | 900000 | 9000000 | 1000000 | How would you determine this value? We managed to get the value of Tk. 1 crore for the car based on the current price of the car in the market. What is the resale value? Resale value is the price at which we are expecting to sell the car in the future once we have...
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...also from professional books of marketing. I also would like to thank Mr. Sunil for giving us such a nice opportunity and freedom to choose a topic we like and to work in it. Abstract The basic objective of my research was to analyze the awareness among customers about the price of a product all over the world. Price even describes the standard a company maintains in its product quality and how they work towards achieving their customer’s satisfaction. As I specially concentrated on Coca Cola Company, the findings reveal that people know a lot about the company’s products, its price & they are completely satisfied with the quality they maintain in soft drinks market. In the highly competitive world of the soft drink industry, the Coca Cola Company stands out as one of the top competitors Table of Contents S. No. | Topic | Pg.No. | 1. | Introduction | | 2. | Factors affecting pricing decisions | | 3. | Pricing objectives | | 4. | Steps in pricing process | | 5. | Essentials of sound pricing strategies | | 6. | Basic pricing methods | | 7. | Price – one of the elements of marketing mix | | 8. | New product V/s Market penetration pricing | | 9. | Resale price maintenance | | 10. | COCA COLA -Introduction | | 11. | Marketing...
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