Price-Reaction Program for Meeting a Competitor's Price Cut

Is the price likely to sigificantly hurt our sales?

How much has this price been cut

Yes

By less then 2%Include a cents-off coupon for the next purchase

By more than 4%Drop price to competitor's price

No

Hold our price at present level; continue to watch competitor's price

By 2-4%Drop price by half of the competitor's price cut

Is it likely to be a permanent price cut?

Has competitorcut his price