Importance of pricing methods in forming a marketing mix strategy

The main objective of this article is to describe the importance of relationship of various components of pricing methods for attaining competitive advantage in market. Pricing methods comprise of Product pricing methods and Service pricing methods. Generally the Product pricing methods consist of product, price, place and promotion and it is generally used for pricing methods of tangible goods. However Service pricing methods are related to three different variables for example people, process and physical evidence. In our economy; price influences the allocation of resources. In companies, price is one significant factor in attaining high market share. Main pricing objectives are, profit maximization, high market share, to attain status quo by stable price and meeting competition in the market. There are four major Methods for price determination,

Cost based pricing

Demand based pricing

Break even concept of pricing

Price related to different market conditions