Methods of pricing
Cost plus pricing
The total cost of producing a product is calculated, and after that a mark-up is added to calculate the price
The price is calculated after keeping in view the price of competition. Competitive price is normally kept just below the price of competition
This is also known as “playing with mind price”.
For example keeping $5.99 price instead of $6
Penetration pricing is when a low price is charged in order to attract customers
A high price is charged for a product or service because it either new or of high quality