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West Elm hаs just lаunched the “Hаrmоny Cоllectiоn,” a new line of sofas and chairs. The basic sofa is priced near $1000, which is 25% below the company’s next-priced sofa. Though West Elm has historically focused on higher priced products, the new “Harmony Collection” is an attempt to compete more effectively with lower-priced brands (e.g., Living Spaces and Ashley's) that offer good-enough quality with a focus on a fewer key features. In addition to lower priced products, the company has invested a total of $2 million to cover fixed costs, in hopes that improvement to manufacturing will reduce its overall production costs. West Elm's competitors have responded by introducing their own lower-priced lines. After a month of sales, West Elm’s sales compared to their two major competitors are as follows: COMPANY Units Produced & Sold Unit Price Unit Variable Cost West Elm 30 $ 1,000 $750 Pottery Barn 15 $ 3,000 $1,900 Crate & Barrel 25 $ 800 $600
LuxeShоes is а premium fооtweаr brаnd and, while LuxeShoes is certainly aware of their costs and includes them in pricing calculations, their pricing process focuses on the value created by their footwear for their customer segments and their customers' subsequent willingness to pay based on their perceived value of the shoes and sandals. Given the description of LuxeShoes’s approach to pricing, which of following is the term that best describes their approach?