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Price
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The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.
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Customer value-based pricing
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Setting price based on buyers' perception on of value rather than on the seller's cost.
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Good-Value pricing
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Offering just the right combination of quality and good service at a fair price.
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Value-added pricing
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Value-added features and services to differentiate a company's offers and charging higher prices.
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Cost-based pricing
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Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.
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Fixed Costs:
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Costs that don't vary with production or sales level.
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Variable Costs
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Costs that vary directly with the level of production.
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Total costs
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The sum of the fixed and variable costs for any given level of production.
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Experience Curve
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The drop in the average per-unit production cost that comes with accumulated production experience.
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Cost-plus pricing
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Adding a standard markup to the cost of the production.
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Break even Pricing
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Setting price to break even on the costs of making and marketing product, or setting price to make a target return.
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Competition-based pricing
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Setting prices based on competition strategies, prices, costs, and market offerings.
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Target costing
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Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.
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Demand Curve
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A curve that shows the number of units a market will buy in a given time period, at different prices that might be charged.
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Price Elasticity
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A measure of the sensitivity of demand to changes in price.
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