involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

Question

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Target costing involves designing a product with a specific cost in mind, in order to meet profit margins desired by the firm while also satisfying customers. This is a proactive approach to pricing, rather than simply setting a price based on production costs (cost-based pricing) or varying prices based on different customer segments (price discrimination). Price leadership is when a company sets the price for a product in an industry and the other companies follow its lead.

Involves Designing a Product So That It Satisfies Customers and Meets