How to determine the price level?
  • Cost plus pricing
    • Used mainly by manufactures, assures that all costs (fixed and variable) are covered and includes a desired level of product.

 

  • Demand pricing
    • Used by companies that sell their product through a variety of sources at differing prices based on demand

 

  • Competitive pricing:
    • Price according to your competitors. Used in competitive markets with little product differentiations.
    • Number of competitors

 

  • Mark-up pricing
    • Adds a level of profit to the cost of the product being retailed. Also good for products that are co-packed.
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