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PRICING - Coggle Diagram
PRICING
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MAJOR PRICING STRATEGIES
VALUE-BASED PRICING
cost determination depends on value delivered in the product or service. setting the price based on customer value perceptions.
Good value pricing: is to offer a product good quality and good price that customers want a fair price. example: zara clothing offers good quality as well as appropriate price to customers.
Value-added pricing: the price of a product or service is even set before conducting marketing. Instead of cut of prices, companies provide more attached value to the products or services they offer to differentiate themselves. example: Dyson Supersonic
COST-BASED PRICING
the price is determined by the true value of a product: cost for producing, distributing, and selling.
the simplest pricing strategy is cost-plus pricing, meaning to add a standard markup to the cost of a product
Main types of cost
Variable cost: cost for raw materials, ingredients, etc. cost that vary from different level of production
Fixed cost: facilities, equipment, rent, building, CEO salaries, etc. cost that do not vary from different level of production or sales level.
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WHAT IS PRICE?
the amount of money that is used to charge for a product or a service. the sum of value that customers exchange to benefit from what is offered.
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