Pricing based on marginal costs misses a critical element in maximising profits -- the relative perceived value of the product which is being priced. In practice, managers use crude proxies. A more sophisticated and valid pricing method, which uses perceived relative value of products is...

Many brand manufacturers are facing increasing competition from competitors entering the market with extremely aggressive prices. To face this new competition the branded manufacturers traditionally lower their own prices or do not react to such attacks at all. Both strategies are not optimal. A...