Final answer:
A sales associate should first explain the value and benefits of their product to the customer rather than immediately matching a competitor's lower advertised price. Competitive pricing and value proposition must be balanced in a perfectly competitive market.
Step-by-step explanation:
When confronted with a customer who presents an advertisement with a lower price from a competitor, as a sales associate, the first step should not be to automatically match the competitor's price. Understanding that you are operating in a perfectly competitive market, it's important to explain the value and benefits of your product to the customer. This creates an opportunity for you to differentiate your product and possibly justify a higher price due to added value, quality, or service that accompanies your product.
Ignoring the customer's request or dismissing the competitor's price as irrelevant would be unwise and may result in losing the customer to the competitor. Drawing from the economics of supply and demand and market competition, it's clear that businesses must remain competitive, but also have the opportunity to distinguish themselves in ways other than price.
If the customer persists or the market pressure is significant, price matching could be considered, but it shouldn't be the reflexive first action. Instead, a balanced approach that takes into account competitive pricing and the unique selling proposition of your product should be evaluated.