Market Structures and Pricing Strategies

Topic: Marketing
Words: 2793 Pages: 10

In order to determine the price of a given product, a market structure is used. According to the findings of recent studies, a wide variety of market structures and pricing strategies are in use. The price of a company’s goods and services is determined by the degree of demand, the cost situation, and the level of competition. One of the most critical management duties is pricing adjustment. A healthy profit margin is maintained by keeping it up-to-date regularly.

One of the most pressing economic challenges is price-fixing. The sort of market structure and pricing terms that a corporation uses are determined by the current market conditions (Nieborg, 2018). It is also important to note that businesses are not self-sufficient. Executives in the business world are expected to make sound decisions based on their knowledge and judgment. A product or service’s price is determined by a number of factors, including the amount of time and effort invested into its development, as well as the level of risk the company is willing to take. Among the factors considered in developing a pricing strategy include factors such as market segments, payment capability, market conditions, rival activity, trade genes, and the costs of inputs. It is geared at a certain group of clients and competitors.

Market structures. A marketing structure is defined as a structure that facilitates the connections between consumers, retailers, products, and services. The market structures are linked to and function with production levels, competition types, products and services, easy access and exit markets, customers, sellers and even agreements between certain agents. A company’s pricing strategy will be determined by the market structure they want to utilize or are forced to use. Basic market structures, such as total competition, oligopoly, and monopoly, must be understood to examine pricing strategies in detail.

Perfect Competition

There is perfect competition as long as there are several buyers and sellers and no barriers to admission or exit. Perfect competition may also be defined as when different companies produce and sell the same high-quality products. Perfect competition should include the same effect, be priced, have a modest market share, and have consumers aware of the products being sold by the company and what the prices are. Finally, total competition permits companies to enter and depart the industry (Ma, 2020). There are several obstacles to entry, high startup costs, and rigorous government regulations that make it difficult for a company to enter and depart a sector in a completely free market, according to some economists.

Pricing Strategy

In a competitive market, the price structure comprises the demand and curve offers of the goods and reflects the value the buyer can and will buy. Price is established by the demand and supply ratio during a market or for a brief period. During the market time, the maximum amount of money that can be offered is constrained by the amount of stock that is now available (Salas-Velasco, 2021) Due to a lack of time in the market, and more can be created because of the increased demand. Businesses can only recoup their costs by selling the products they’ve already manufactured.

Depending on the type of substance, this period could be anywhere from an hour to a few days to a few weeks. The supply curve also shows what a given supplier knows and is willing to offer in the market pricing. When it comes to supply and demand, a complete competitive pricing plan must be balanced (Salas-Velasco, 2021). Marketing sets the price of a product or service, and as long as manufacturing costs are lower than revenue, this market structure will continue to work. Supplies of perishable items, such as fresh seafood, are strictly limited to what is available on a given day.

Non-perishable but recyclable assets may be stored or stored away from the market and transferred to the next market period. There will be no storage during the following market session, therefore everything must be sold on the same day, no matter how much there is to sell. After that, there will be two key pricing points. For starters, if the price is too high, the seller will be willing to sell their entire stock. At the second price level, the seller will not sell for any price in the current market but will keep the stock for longer. Reserve Price refers to the lower price a seller will not sell at.

Monopolistic Competition

Monopolistic competition is related to the best competition. Monopolistic competition can be described as a market with numerous small firms competing inside the market, ultimately leading to each producer’s dominant power. A market structure with product divisions can also be defined as monopolistic competition.

Any form of small business, privately owned business, or even a store or restaurant, can be an example of a competitive market (Nieborg, 2018). Companies can enter this industry as they see fit because of the lack of restrictions. Nike is a good example of a firm that could be affected by this market structure. As a result, each firm is the exclusive producer of a specific “product” kind. He has a stranglehold on a particular subgenre. Even while different varieties have similar followers, the heated competition between many different “single” manufacturers of these things is intense. The term “monopolistic competition” refers to a market structure in which many “monopolists” compete against one another.

Pricing strategy

It is common for companies to determine commodity pricing as part of their monopolistic competitive market. As a result, small businesses and private companies have the freedom to set their prices and production expenses. A company’s managers should study ahead of time to discover why their competitors are selling identical products at a lower price. Marketing and promotion for a product or service might benefit from the company’s logo and brand. Marketing and marketing are critical in this market structure since competition might be fierce (Ma, 2020). All businesses and their partners are affected by market dynamics. It identifies the price point at which a business can charge whatever price it chooses.

Each firm that manufactures and sells the same product and several other comparable enterprises all sell the same goods establishes the zero market power foundation. Individual vendors are not divided because all companies sell the same goods (Nieborg, 2018). For buyers, finding a low-priced seller is all that matters. Firms in a “full competition” market sell at the same price as their low-cost competitors. Consumers would leave a company if it increased its value over the market price. If the company could drop its worth slightly below the market price, it would be full of customers transferring to other companies.


An oligopoly is a market structure with only a few players. The market is dominated by a small number of significant corporations in this area. In addition to Rupert Murdoch’s News Corporation, Viacom, CBS Corporation, Walt Disney, and NBC Universal, other instances of oligopolies include national media outlets such as Rupert Murdoch’s Viacom, CBS Corporation, and Walt Disney, and NBC Universal (Nieborg, 2018). As another illustration, Ford, GMC, and Chrysler are the dominant players in the automotive business. The oligopoly market structure of Apple and Google will also be discussed later, given the two companies jointly control the smartphone market.

Pricing strategy

Because of the Oligopoly market structure, rivals generally set product and service prices ad hoc. Essentially, this implies that the company and its management must conduct extensive market research to determine what their rivals are charging for the goods and then attempt to match or undercut that price. Creating barriers to entry is one-way corporations in this market system preserve their influence (Salas-Velasco, 2021). Oligopolies, for example, may appear to be making their market more expensive or making it more difficult for new competitors to enter. Large and powerful corporations can’t compete with these pricing tactics because many people don’t recognize their brand or have it yet, making it impossible for new enterprises to compete. Many customers have come to trust me. Oligopoly is characterized by a limited number of competing enterprises that control a considerable share of the overall market value.

Consequently, the impact of a single company’s pricing or product adjustment on the sales of its competitors is visible and considerable. Whenever a corporation accomplishes something, its competitors are bound to respond. Oligopolistic enterprises behave as if they are in complete or independent competition, with a high degree of interdependence and independence between them (Salas-Velasco, 2021). The oligopoly makes it harder for new entrants to enter. Unrestricted access is not available. A significant issue in oligopolistic firms outsourcing pricing and decision-making is the type of intervention used and how much of an impact it has.


One of the most common signs of monopoly is the presence of an industry leader with fewer competitors. The fact that Netflix has approximately 50 million subscribers, and even some of its competitors still excel, is an example of a corporation that is on the edge of becoming a monopoly.” Google, Facebook, and Microsoft are just a few examples of corporations that fit this market structure (Ma, 2020). The monopolistic nature of Google’s search engine and Facebook’s role as a popular social networking site for adults make these two corporations excellent case studies. This does not rule out the existence of competing firms in the market, but it does indicate the presence of a single, extremely dominant one.

Pricing strategy

Because prices in a monopolistic market are determined solely by supply and demand, there is no complex pricing strategy to be found here. Here, the price method is easy. With no competition, a monopoly can set prices more easily. In order to avoid attracting competitors or to benefit from a shift in consumer behavior or usage patterns in favor of a shift in products, monopolists watch their prices carefully (Nieborg, 2018). If you raise a product’s price, you may decrease sales because prices are determined by demand.

Case study

Telecommunications, satellite, and other telecommunications businesses have been in fierce competition recently. Broadcast networks have also utilized full competition for several decades. Social media platforms such as Facebook, Twitter, Instagram, and Google Plus have won the entire competition regarding internet service providers and social media platforms. Communications companies are impacted by inflation, interest rates, and taxation (Ma, 2020). A program’s cost influences its pricing per customer. Towers and other infrastructure are expensive to set up in remote locations. Customers who don’t live in big cities are affected. The need for communication services develops as more and more homes are created. Depending on the region, the number of users in the area, and the demand for telecommunications services, this may lead to an increase in pricing (and income).

It is all about the customers and the technology. Companies facilitate Internet and mobile phone sales. In order to connect with customers throughout the world, they build social media accounts, advertisements on websites, and digital marketing strategies. To help customers, live chat customer support representatives are hired. Advertisers, authors, and media managers run online advertising and campaigns. Websites for computers and mobile devices necessitate the expertise of graphic design and editing professionals (Nieborg, 2018). Other service providers were encouraged to enter the market because of this. In addition, quick food restaurants and supermarkets are produced and sold by independent competitors. These suppliers manufacture a wide range of products that appeal to a wide audience.

It allows customers to buy what they can afford by reducing product type controls and discounts. Only a few organizations in the United States provide similar services and products. Companies like Airbus and Boeing are well-known airlines that compete against each other; for example, Coke and Pepsi are two of the most recognized soft drink businesses in the world, and their pricing practices make the market organically oligopoly. Inventors in countries like the United States and India have exclusive rights to market their products for a set time. As a result, some patent firms provide them with a 10-year license to sell their products. These thoughts can’t be copied or processed by anybody else.

Microsoft is a fantastic example of a company that focuses on computer software. It can maintain its monopoly status by keeping competitors from entering the market. Governments have been known to permit long-term rule. According to their level and level of competitiveness of goods and services, industries are classed and subdivided according to economic market structure. On the basis of elements that influence the behavior and results of enterprises operating in a certain market. Factors that influence the structure of a market include how many buyers and sellers there are, how well they can negotiate, how much emphasis they have on their product, and how easy or difficult it is to enter and depart the market. Different industries are classed and segmented according to their level and competitiveness of services and goods (Ma, 2020). Market structure relates to a monopolistic competition; oligopoly market or monopolistic competition are the most common forms of market systems. Customers, sellers, and more are all reflected in the structure of the market.

Perfect competition, monopolistic competition, oligopolies, and monopolies are all examples of market arrangements that can be categorized into four groups. Because of the following factors, the categories are different from one another: Full and monopolistic competition has many producers, oligopoly has few, and each has only one. Market structures can be better understood in economics by looking at a list of items or qualities displayed by several parties (Salas-Velasco, 2021). These markets can be broken down into the following seven categories. The industry’s consumer structure, customer benefit, product division rate, input cost type, number of market participants, degree of vertical integration within the same industry, and the largest player’s market share are all factors to consider.

It is widely accepted in economics that market volatility directly impacts a product’s price. Normally, market prices rise as the number of players in a market decreases. According to this prediction, the newly merged firm will have a combined incentive to raise prices above their pre-consolidation levels, known as the “combined effect” of consolidation. Some individuals may become more prone to inflation due to the combined influence of these two factors. It’s called “one side” because it encourages one corporation to raise prices on its own (Nieborg, 2018). Due to the numerous parties involved and the price reductions that have resulted from the mergers, we refer to this newest result as a “multi-country” endeavor. Such effects are prevalent when two organizations manufacture one another instead of another, as we’ll see in the next sections. This can significantly impact pricing efficiency in the economy, as the total cost of producing a given product depends on the structure of the market supply. In that instance, the overall cost of production is frequently influenced by the number of producing companies.


It is obvious from the preceding explanation that the marketplace influences price tactics. There are four main types of market organization. The degree to which a corporation can affect the price and the number of sellers are only a few characteristics of these market arrangements. When buyers and sellers come together to do business, a market is. Market signals refer to the market’s structure, referred to as a market structure. This is the number of businesses in a certain market area that manufacture the same goods and services. The market structure greatly influences businesses’ behavior. The market structure affects the availability of various items on the market.

Many concepts and notions connected to price are crucial to understanding because price drives all economic activity. Pricing theories are in-depth explored by price on the current state of affairs. For pricing purposes, time is critical because one of the price selections depends on how long it takes to alter the offer. That is to say, to be successful, a business must have a solid marketing foundation. As a result, success in the company depends on selecting the appropriate market structure. To satisfy client demands cost-effectively, economists have identified four main market sectors that differ in efficiency and effectiveness. In this study, pricing strategies are used to analyze market features.

The monopoly market has a high level of entry barriers, whereas the fully competitive market has no entry barriers at all. Companies do better in a competitive market than they do in the private sector. When the market is monopolistic and completely competitive, there are many stores, which means that there is no barrier to entry. When the demand for a product rises, manufacturers adjust their prices accordingly. A few competing stores exist in an oligopoly market, where prices are set by factors other than supply and demand. Oligopolistic markets are characterized by large but less restrictive market barriers and price volatility.


Ma, J. H. (2020). A time-based pricing game in a competitive vehicle market regarding the intervention of carbon emission reduction. Energy Policy,, 142, 111440. Web.

Nieborg, D. B. (2018). The platformization of cultural production: Theorizing the contingent cultural commodity. New media & society, 20(11), 4275-4292. Web.

Salas-Velasco, M. (2021). Market structure and pricing strategies: A mathematical and graphical analysis of price discrimination, accompanied by a Microsoft Excel–based tool. Journal of Education for Business, 96(2), 127-133. Web.

The Sunshine Shop's Digital Marketing Strategy
Public Relations and Sales in the Silicon Valley Company