A plan which determines the best (at the time of making) pricing decision.
“ The planning of prices, including the setting of discounts, in considering items such as the price of competitive products, manufacturing and distribution costs, the firms growth and profitability, customer wants, and the elasticity of demand.”
It is always important for a firm to predict what the competition may do if prices are changed.
You are in charge of pricing of hotel rooms in a large group in a highly competitive market. You are considering a tactical price reduction in an attempt to gain market share. What may the competition do to respond?