What is pricing & how does it work?

Pricing refers to the decision-making process that goes into establishing a value for a product or service. There are many different strategies that a business can use when setting prices, but they are all a form of pricing. The price that's set during the pricing process is what the customer will pay for that product or service.

What is the difference between price and cost?

Whereas the price, determined by supply and demand in a free market, is what an individual is willing to pay and a seller is willing to sell for a product or service. Cost is typically the expense incurred for a product or service being sold by a company. Price is the amount a customer is willing to pay for a product or service.

What is penetration pricing?

Penetration pricing is when a business sets the price of a product or service low at the beginning, then raises the price once the company is more established. Businesses that provide a service can draw customers in with low pricing, then win their loyalty with great service.

What is a price in finance?

Back to Basics - Finance & Development, December 2013 What Is a Price? Maybe more than one bargained for. The answer varies depending on the transaction At its most basic, a price is the amount of money that a buyer gives to a seller in exchange for a good or a service.