What Are The Factors To Consider When Determining The Price Gap Between Acquiring Company

3.4.3. Price

Factors like how the competitors devise their prices, cost of production, cost of channel distribution and the acquiring company’s objective will deeply influence the decision how to make the price appropriate (Haberer, 2008).

When it comes to the setting of the price, the vital approach is research of the market: what the standard of paying is and what the capacity for customers to pay is (Haberer, 2008). Concerning the price gap between acquiring company and acquired company, if the acquired company has segmentation with a low market price, and the acquiring company wants to therefore open the new market with low position, there is no need for the new company to change the price. Moreover, joining with two companies, the competitiveness of price of the newly built company may be influenced in various ways (Weber & Dholakia, 2000).

3.4.4. Promotion

In accordance with the type of product, as an element of the marketing mix, promotion is subject to much variation (Lancaster & Reynolds, 2005). They also indicate that promotion receives much attention as a marketing function, since promotion usually has the highest budget allocation of all marketing mix elements in consumer markets, particularly after the

Also, the synergistic advantages that were foreseen after the deal have not been fruitful up to expectations till date. Further, the margins that were supposed to increase have gone down even after 4 years of the deal. Market condition in the Europe, mainly UK have worsened due to the rising imports and subdued manufacturing sector. The company continued to restructure its business and has announced closure of some of the sites. Also company has taken significant non-cash impairment charges for the last FY. So far, Tata Steel still has to wait for few more years for the deal to be profitable if everything goes