A company producing mid-range smart home devices has noticed increasing competition and high price sensitivity in its target market. To expand sales and increase market share, management decides to set prices __________ (1) than those of its main competitors. This decision reflects a pricing objective focused on business __________ (2) rather than short-term profit maximization.

Before finalizing the price, the firm analyzes its cost structure, which includes both __________ (3) costs such as rent and insurance, and __________ (4) costs like materials and labor per unit. Management calculates the __________ (5) point to determine the minimum sales volume required to avoid losses.

As the market becomes more saturated and sales growth slows, the company considers repositioning the product by adjusting its price. If the firm chooses to maximize profits despite declining sales, it would adopt a __________ (6) strategy by setting __________ (7) prices. However, if the goal is to maintain its current position, the firm is more likely to __________ (8) competitors’ prices.

Rather than relying solely on cost-based pricing, the company also evaluates the __________ (9) value of the product to customers. This market-led approach ensures that the final price is consistent with the firm’s overall market __________ (10) and distribution strategy.


Last modified: Friday, 5 June 2026, 10:29 AM