PRODUCT CHARACTERISTICS AND PRICE WARS: INSIGHTS FROM THE INDONESIAN LIGHTING INDUSTRY

Abstract

— Competitive interaction is typically defined as transactional activities conducted in the form of
product exchange. While various discussions have been conducted in regard to products being a source of
competitive advantage, several product characteristics that serve as a firm’s competitive offering have been
argued to influence and induce the occurrence of price wars. Using a sample of respondents in the
Indonesian lighting industry, this research is aimed to generate an understanding of how practitioners view
their product selection in relation to competition and the steps to overcome price wars. Survey data in this
research are collected through quantitative methodology from practitioners in the industry. While head-tohead competition can be predicted as the main cause of price wars, the study found that many practitioners
were unable to redefine their revenue dependency from the products they sold, based on their dependency to
a specific customer segment.