"Pricing is strongly linked to the business model. It is defined as the process of determining the value that is received by an organization in exchange of its products or services. Price of a product or service of an organization has a direct impact on the profitability of the organisation. Therefore fixing appropriate price is a strategic decision that is taken and reviewed by the top management at regular intervals. Business can use a variety of pricing strategies when selling a product or service. The pricing factors considered are manufacturing cost, market place, competition, market condition and quality of product. In order to determine the most effective pricing strategy for a company, we need to first identify the company’s pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy. Among others, pricing strategy takes into account segments, ability to pay, market conditions, competitors’ action, trade margins, input costs. It is targeted at the defined customers and against competitors. The three basic pricing strategies are skimming, neutral and penetration. The presentation gives better understanding on the topic. "

Bridgit Peter

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