Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit

Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit

Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit from the contract and the reason for that is to create goodwill (to increase expected future business from the buyer). How would you value the goodwill that is obtained in this way?

Think about an example that pertains to you. If there is expected goodwill would you be prepared to bid lower to get a contract? Explain your reasons. In 300 words or more, please, provide your response to the above discussion question.

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A good reputation is considered an intangible asset. The reduction in price of a commodity leading to reduced profits but increased reputation is seen as a gesture for future profits and economic growth. The idea is to come up with an introductory or penetration price that sets a relatively low price so as to cause many units of the product to be sold. This leads to greater market penetration and likewise, greater profits……

APA

319 words