Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC’s Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC’s Bakery prices. What type of pricing strategy is Diane implementing?
a. internal pricing
b. customer-oriented pricing
c. profit-oriented pricing
d. sales-oriented pricing
e. competitor-oriented pricing

The correct answer is e. competitor-oriented pricing .

Explanation:

A competition-oriented pricing strategy means that the pricing decision corresponds to the consumer's own issues, which influences their purchase decision. Diane's decision to lower her cupcakes and equalize the price of CC's Bakery only supposes the materialization of a strategy that seeks to discard the price as a determining factor in the sales process and assign it to other variables such as attention, quality, etc.

answer; encouraging the development of innovations by firms attempting to break a monopoly; (creative destruction)

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