One of your clients, Sandy George, is seeking clarification about the best way to approach pricing in her business, Sandys Childcare Centre. Childcare is an important and popular pursuit in Australia. Play-stores, book-stores, food suppliers, retailers and an array of early childhood learning centres cater for this market segment. Sandys Childcare Centre operates in a competitive industry. Sandy George has decided to pursue a differentiation strategy, by stipulating high quality as a standard for inputs (e.g. employees; learning resources and training), excellent service, knowledgeable advice and the option for customers (parents) to provide ongoing and real-time feedback for any services they find do not meet their expectations.

Required: Advise to Sandy George of the choice between the two basic approaches to pricing, evaluating them in relation to the current situation of Sandys Childcare Centre and recommending an appropriate approach. (6 marks)