What are the two ways of pricing?

There are generally three pricing methods.

1, cost-based pricing:

The most basic pricing method is the standard addition of product cost. Price = unit cost X( 1+ expected rate of return), which is a pricing method generally adopted by enterprises, but this pricing is not in line with economic logic, because the price is reached by buyers and sellers, and the cost-based pricing only considers the wishes of the seller and ignores the wishes of the buyer.

This method only considers the production and sales cost and gross profit (sales incentive) of the enterprise, but does not consider the customer's willingness to pay (perceived value), which may bring two unfavorable consequences.

If the price is far lower than the customer's willingness to pay, then the enterprise may give up a lot of profits that could have been obtained in vain; If the price exceeds the customer's willingness to pay, the customer will not buy it, so it is difficult to achieve large-scale sales.

2. Value pricing method:

It is based on the customer's perceived value, considering the customer's consumer surplus and the gross profit level of the enterprise. This pricing method takes into account the wishes of both the seller and the buyer, so it is a pricing method that conforms to the logic of economics. ?

3. Competitive pricing method:

This method is based on the price of competitors, plus the value of products to price accordingly. This method is a kind of quasi-value pricing, because the price of competitive products has a great influence on the perceived value of customers. Although enterprises do not directly consider the perceived value of customers, the price of competitive products can reflect the perceived value of customers to a great extent.

Extended data:

Basic principles of pricing

Pricing should not be arbitrary, but should follow certain principles. This principle should consider both the short-term interests and the long-term interests of enterprises. It is necessary to show flexibility and flexibility without violating relevant laws and regulations, so as to be favorable, legal and moderate.

1, favorable principle:

That is, the price level must be beneficial to the enterprise and can achieve the business objectives of the enterprise. No matter whether the price is set high or low, it should be conducive to improving the competitiveness and market share of products, and ultimately ensure that enterprises get as much profit as possible.

2. Law-abiding principle:

In other words, when making product prices, we must conscientiously implement the relevant policies of the state, such as new product pricing policy, high quality and good price policy, floating price policy and so on. And we can neither set prices at will nor raise prices in disguise.

3, the reasonable price limit is the degree of pricing:

A reasonable price floor is that the sales price of the product is maintained above the breakeven point; The reasonable upper price limit is that the product can be borne by the target consumers; The reasonable price limit should be in an appropriate position between the reasonable upper and lower limits; A reasonable price is to make the enterprise get a reasonable profit, not the highest profit.

Baidu Encyclopedia-Price Strategy