Pricing Approaches

Setting a price for a product or service is not an easy task and your pricing approaches matter a lot in this regard. The price of a product or service is kept to a level that can generate both profit as well as demand. However generally the cost of the product or service provides the lower limit of the price. Although the perceived value by consumers provides the upper limit for setting price. Business Organizations should also take into account the prices of their competitors. Along with other internal and external factors. There are general Pricing Approaches that can be applied by businesses in setting prices for their products or services. These pricing approaches are of three types.