Q. Your company manufactures a quality line of home kitchen appliances, refrigerators, stoves, dishwashers, etc -- and you are highly competitive with companies such as Kitchen Aid, Jenn Air and others. The market is quite priced sensitive.

You've just learned that your primary competitor has just cut their prices to the consumer by 7%. Illustrate what might be some reasons that would support their decision to make a price reduction? Illustrate what should be your thoughtful reaction?