This case is designed to illustrate the relationships among product costs, consumer demand, competition and industry structure, and a firm’s pricing objectives. The case has a specific decision orientation in that students are asked whether they would raise, lower, or maintain current prices on each of two distinct product lines. It allows for an interesting debate between accounting-oriented students and marketing-oriented students. The marketing manager of the industrial valve division of Cantro Corporation must decide on pricing policies for his division’s two products, lubricated and eccentric plug valves. These two products exhibit different cost structures and competitive characteristics. These are the division’s objectives for these products (1) to maintain and increase market share, (2) to improve profits, and (3) to maintain a posture of industry leadership through stable and responsible pricing practices.
Darden Business Publishing – University of Virginia