Should we match a price cut?
| Customer segment | Share of our volume (%) | Volume lost when we held our price (%) |
|---|---|---|
| Loyal regular buyers | 60 | 5 |
| Occasional buyers | 25 | 12 |
| Price-sensitive buyers | 15 | 60 |
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.
Interviewer view
For the person running the case
Candidate view
For the person answering the case
The exhibit
| Customer segment | Share of our volume (%) | Volume lost when we held our price (%) |
|---|---|---|
| Loyal regular buyers | 60 | 5 |
| Occasional buyers | 25 | 12 |
| Price-sensitive buyers | 15 | 60 |
My notes on this case
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