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Competitive response

Should we match a price cut?

Prints the prompt and every part you have revealed so far.
How our customers reacted the last time a rival cut price
How our customers reacted the last time a rival cut price
Customer segmentShare of our volume (%)Volume lost when we held our price (%)
Loyal regular buyers605
Occasional buyers2512
Price-sensitive buyers1560

The prompt

A rival cut its price by 10 percent. We sell 1,000,000 units a year at USD 20, earning a contribution of USD 5 per unit (a 25 percent margin). If we match, contribution falls to USD 3 per unit and we keep all our volume. If we hold our price, we will lose some volume; the table below shows how each customer segment reacted the last time a rival cut price. Which is better, and when should we reconsider?

Interviewer-led: the interviewer shows the segment table and asks for the expected volume loss, profit under each option, the break-even point, and a recommendation.

Practice with a partner

1. Send the interviewer link to a friend. They read the case aloud and hold the answers.

2. You open the candidate view: you see only the prompt, a timer and a notes box.

3. Speak the case out loud. Your partner shares data when you ask, then scores you with the rubric.

Your turn first

The exhibit

How our customers reacted the last time a rival cut price
How our customers reacted the last time a rival cut price
Customer segmentShare of our volume (%)Volume lost when we held our price (%)
Loyal regular buyers605
Occasional buyers2512
Price-sensitive buyers1560
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