Tuesday, January 22, 2008

4 General Pricing Approaches

There are four general pricing approaches:
1) mark-up pricing - is to have a fixed mark-up on the cost of the product to set the price, ex: retail stores
2) value-based pricing (demand-based pricing) is setting price based on buyers' perceptions of value independent of cost, ex: louis vuitton and rolex (nobody ever questioned how much it costs to make a rolex cost, price is not in relation to cost. people base it on how many people have it, brand name)
3) value pricing: is offering the right combination of quality and good service at a fair price, ex: value meal menu
4) comepetition-based pricing: is to set price following that of the industry leader ex: breakfast cereal (ex: kellogs)

1 comment:

Jamsmith said...
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