Product Pricing Strategy

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In this short essay, the author presents the strategic perspective of product pricing with an argument whether it should be value based or actual costing based. The author also presents the ethical considerations & other concerns in product pricing. In the end, the author has presented few discussion points.


Hence, it is very important that the organization should know all their costs in developing the products and in their marketing & inventory holding. Once the internal thresholds are known there are multiple additional factors that drive pricing decisions from market perspective. Monroe and Bitta (1978. pp414) presented a consolidated view of multiple models of product pricing decision classified as - new product models, product line models, price change models and price structure models. The indicated their choice for market comparisons based pricing - like related products, volumes in demands, number of discounted units, price differential with competition, etc. These factors have been empirically accepted by product strategists in pricing their products. However, the author agrees with a new theory presented more recently in 2000 by Thakur and Nair et al. (2000. pp90-92) on product pricing stating that products should be priced based on consumer preferences and not by the actual prices or consumer budgets. ...
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