Final answer:
The method of determining a price based on the customer's willingness to pay and the company's required profit, before figuring out the product's features, is called target costing. Therefore correct option is C
Step-by-step explanation:
When a company considers how to price a new product, determines what price customers will pay, and identifies the desired profit before determining the features it can offer, this method of determining price is known as target costing.
Target costing begins with identifying the customer's expected price point and the company's required profit margin. From there, the company works backwards to determine the cost structure that allows for these conditions. This is different from cost-based pricing, where pricing starts with the cost of production and adds on a profit margin, or competition-oriented pricing, which focuses on competitors' prices. Value pricing, on the other hand, is when the price is based on the perceived value to the customer rather than the cost of the product.