When using competition-oriented pricing approaches in competitive markets, price setters stress:

• A. the cost of production and distribution
• B. the prices charged by competitors for similar products
• C. the perceived value of the product to consumers
• D. the historical pricing trends of the firm

Answer: (B)

Verified step by step guidance

1. Understand that competition-oriented pricing focuses on setting prices based primarily on what competitors charge rather than internal costs or consumer perceptions.
2. Recognize that in competitive markets, firms often look at the prices of similar products offered by competitors to remain competitive and avoid losing market share.
3. Note that cost of production and distribution, perceived value to consumers, and historical pricing trends are more relevant to other pricing strategies like cost-based or value-based pricing.
4. Identify that the key element in competition-oriented pricing is monitoring and responding to competitors' prices to set your own price accordingly.
5. Conclude that the correct focus for price setters using competition-oriented pricing is the prices charged by competitors for similar products.