ABSTRACT
Peterborough Tubes was part of a large, diversified group which dominated its industry. This chapter examines the decisions taken after devaluation for two products, Product D and X-ply, both industrial raw materials. For both products, the company was virtually a monopolist in the UK. Peterborough Tubes made X-ply under licence from an American firm. It was a monopolist of X-ply in Europe, although it faced a great deal of indirect competition. Peterborough Tubes had particularly good market information about the position of both products in Europe. Peterborough Tubes did not expect that these price reductions would always lead to an immediate increase in sales. As the marketing manager explained, ‘a potential customer buys on technical grounds, so that the initial effect is to stimulate an interest in the product, which will take time before it is translated into extra sales’.
