1. Customers' price sensitivity differs for each customer. Nevertheless, companies try to understand their buying behavior when determining price elasticity or formulating the demand function. a) Please explain why price elasticity is important for companies. b) Please name four factors affecting price sensitivity. 2. Compared to other instruments of the marketing mix, researchers often outline the special role of pricing. Can you think of any characteristics typical for pricing decision clarifying its special role? 3. Most companies use cost-plus pricing for setting prices because this approach is a relatively easy, cheap and fast way to assess prices. But at the same time, companies know that the success of cost-based pricing is limited. a) Please name the two main problems of cost-based pricing and describe them briefly. b) What can companies do to encounter these problems? 4. Many companies try to account for differences in the customers' willingness to pay by implementing price differentiation. Various criteria can serve as a basis for price differentiation. a) Please name the different forms of price differentiation