This chapter deals with important pricing decision concepts and the different methods of pricing a product.
Several pricing methods are available to businesses. Before adopting a pricing strategy, certain factors need to be considered. Internal pricing factors include production and other costs, and marketing strategies. External factors include market competition, demand and supply relationships, customer behavior, and legal requirements.
The different pricing methods include: cost-based pricing, value-based pricing, and competition-based pricing. Pricing strategies for new products include penetration pricing and price skimming.