Pet Grooming
You and your two roommates are starting a pet grooming service to help put yourself through college. There are two other well-established pet services in your area.
1. Should you set your price higher or lower than that of the competition? Justify your answer.
One roommate believes the most important objective in setting prices for the new pet grooming business is to generate a large profit, while keeping an eye on your competitors’ prices; the other roommate believes it is important to maximize sales and set prices according to what your customers expect to pay.
2. Who is right and why?
3. How do the number of competitors in the market affect YOUR pricing strategy?