Price Competition

1.  Highly competitive industry (commodity products)

• Industries in which price is the most significant consideration in customers' purchase decisions tend to be highly competitive.
• A slight increase in price may cause customers to switch to substitute products if they are widely available.

2.  Franchise industry (franchise products)

• Price is not as important if companies in an industry are able to effectively differentiate their products in terms of quality and performance.  
• Customers may not focus on price as much if product reliability is more important to them.