The Five Cs of Pricing

Each firm embraces objectives that management believes will make the firm more successful. These specific objectives usually reflect how the firm intends to grow. Do managers want it to grow by increasing profits, increasing sales, decreasing competition, or building customer satisfaction? These questions are answered by a firm's choice of pricing strategy. This activity is important because pricing of a company's products and services should support and allow the firm to reach its overall goals.

The goal of this activity is for you to differentiate between pricing orientations.

Read the description of each company. Match the pricing orientations to the corresponding company descriptions.

Profit$-$orientation Sales$-$orientation Competitor$-$orientation Customer$-$orientation

Match each of the options above to the items below.

Before setting prices, a new golf course surveys its target market to determine what they expect to pay for greens fees.

No answer

A grocery store monitors the prices of its competitor$$s products and adjusts prices according to how the competitor changes its prices.

No answer

A shoe company prices all products with the goal of obtaining a $22$ percent return on investment.

No answer

A new movie theater focuses on ticket sales and market share and therefore sets ticket prices lower than competitors and accepts lower profits at first.

No answer