Price is one of the most important and least understood factors of marketing. For a significant number of goods and services, price is established by the technique of competitive bidding. In many instances such competitive bidding occurs after the items have been priced under monopolistic conditions. A study of 356 items which had been priced under sole source and then under competitive conditions showed that the introduction of competition is associated with a reduction in unit price of between 10.8 and 17.5%, depending on the size of the order. The number of units purchased also has a significant effect on price.
Get full access to this article
View all access options for this article.
References
1.
BakerMichael J. (1974), Marketing, An Introductory Text. London: Macmillian Press Ltd., 167–8.
2.
BooneLouis E. and KurtzDavid L. (1974), Contemporary Marketing. Hinsdale, Illinois: The Dryden Press.
3.
BurtDavid N. (1976), “Getting the Right Price with the Right Contract,” Management Review (May), 24–34.
4.
BurtDavid N. (1972), “Should Cost—A Multimillion Dollar Savings,” Air University Review (September–October).
5.
FriedmanLawrence (1956), “A Competitive Bidding Strategy,” Operations Research (February).
6.
GistRonald R. (1974), Marketing and Society. Hinsdale, Illinois: The Dryden Press.
7.
GuiltinanJoseph P. (1976), “Risk-Aversive Pricing Policies: Problems and Alternatives,” Journal of Marketing, 40 (January).
8.
HarperDonald V. (1966), Price Policy and Procedure. New York: Harcourt, Brace and World, Inc.
9.
HillRichard M., AlexanderRalph S., and CrossJames S., (1975), Industrial Marketing. Homewood, Illinois: Richard D. Irwin, Inc.
10.
HillRoy W. (1973), Marketing Technological Products to Industry. New York: Pergamon Press.
11.
JohnsonRobert E. and McKieJ. W. (1968), Competition in the Reprocurement Process, Memorandom RM-5657-PR. Santa Monica, California: RAND Corporation.
12.
KotlerPhilip (1971), Marketing Decision Making. New York: Holt, Rinehart and Winston.
13.
LeeLamarJr., and DonaldW.Dobler (1971), Purchasing and Materials Management. New York: McGraw-Hill Book Company.
14.
MillerDavid W. and StarrMartin K. (1960), Executive Decisions and Operations Research. Englewood Cliffs, New Jersey: Prentice-Hall, Inc.
15.
OlsonAlan E., CunninghamJ. A., and WilkinsD. J. (1974), A Cost-Benefit Analysis of Competitive Versus Sole-Source Procurement of Aircraft Replenishment Spare Parts. Wright-Patterson AFB, Ohio: Air Force Institute of Technology.
16.
OxenfeldtAlfred R. (1973), “A Decision-making Structure for Price Decisions,” Journal of Marketing, 37 (January).
17.
OxenfeldtAlfred R. (1961), Pricing for Marketing Executives. San Francisco: Wadsworth.
18.
OxenfeldtAlfred R., MillerDavid, AbrahamShuckman, and CharlesWinick (1965), Insights into Pricing. Belmont, California: Wadsworth.
19.
U.S. Bureau of Labor Statistics (1972), Wholesale Prices and Price Indexes, Washington, D.C.
20.
U.S. Government Printing Office (1975), Armed Services Procurement Regulation, Washington, D.C.142–52.
