The importance of pricing can not be underestimated as incorrect pricing can often result in the failure of a business. New businesses often make the mistake of either charging too little or too much for their product or service. So to help you avoid making one of these mistakes, the following section will outline some of the guiding principles of price determination.
Price is a key part of marketing.
Setting prices is called pricing. Setting Prices Prices for products and services can be set by pricing to the market, pricing to your costs, and rule of thumb pricing. New business people with little experience may set an initial price based on the market, and then as experience grows, re-set prices according to costs. The choices that a business ultimately makes about its markets and sales make a big difference in pricing. In pricing, as in everything else in business, the customer is the reference point.