Marketing managers who understand what influences target customers' price sensitivity are better able to estimate the demand curve facing a firm. Price sensitivity is influenced by many factors, but, in general, the availability of product substitutes, the total overall expense, barriers to switching, and cost sharing arrangements are among the most important.

Understanding price sensitivity and its overall effect on customer and consumer allows marketing managers to decide which pricing method is most appropriate for their target market. Determining the pricing of products and services is critical to market success. While it is easy to adjust prices, a wrong pricing decision may cause long$-$term damage in the marketplace.

Identify the company that best describes each type of demand$-$oriented pricing. Move each label to the correct drop zone box.The notes button next to a label provides more information.