Problem
Your friend Chloe has just started her own hairdressing salon in your city. Chloe is a highly qualified hairdresser and provides a complimentary barista coffee for all her customers. As such, Chloe currently prices her services at a premium (high price relative to customers). There are a number of hairdressing salons in your city, who have gained a loyal customer group. As a result, Chloe is finding it difficult to attract new customers to her business. Chloe is not too concerned about making a profit in the short-term, but cares about increasing her sales. Chloe has come to you for advice regarding the pricing strategy of her hairdressing salon.
• First, outline the importance of pricing to Chloe's hairdressing salon.
• Next, suggest which pricing objective Chloe should adopt.
• Finally, recommend and justify three pricing strategies Chloe could adopt when pricing the services at her hairdressing salon.
Ensure your answer illustrates definitions, explanations, examples, theoretical justification and application to the case wherever possible.