Comprehensive Pricing
Strategy and Costing
Concepts for Business
Students
|Guaranteed success|
, Fixed Cost Also known as overhead costs, are expenses that do
not vary even if the level of production or sales
changes.
Customer-Based Pricing (Value- Where a business sets the price of a product or
Based Pricing) service based on the perceived value it has to the
customer.
Competition-Based Price Strategy When the firm sets prices in relation to the
competitors.
Objective Setting The first step in developing a pricing strategy.
Sales-Based Objective Interested in sales growth and/or maximizing market
share.
Profit-Based Objective Maximizing profit, earning a satisfactory profit,
optimizing the return on investment, or securing an
early recovery of cash.
Broad Price Policy Provides procedures, rules, and methods to act in
one specific situation.
Penetration Pricing Uses low prices to capture/attract the larger/mass
market for a product or service.
Skimming Pricing Uses high prices to attract the market segment
more.
Strategy and Costing
Concepts for Business
Students
|Guaranteed success|
, Fixed Cost Also known as overhead costs, are expenses that do
not vary even if the level of production or sales
changes.
Customer-Based Pricing (Value- Where a business sets the price of a product or
Based Pricing) service based on the perceived value it has to the
customer.
Competition-Based Price Strategy When the firm sets prices in relation to the
competitors.
Objective Setting The first step in developing a pricing strategy.
Sales-Based Objective Interested in sales growth and/or maximizing market
share.
Profit-Based Objective Maximizing profit, earning a satisfactory profit,
optimizing the return on investment, or securing an
early recovery of cash.
Broad Price Policy Provides procedures, rules, and methods to act in
one specific situation.
Penetration Pricing Uses low prices to capture/attract the larger/mass
market for a product or service.
Skimming Pricing Uses high prices to attract the market segment
more.
