In order to set pricing, certain decisions need to be made with respect to:
1. Pricing Strategy
2. Business Revenue Model
3. Pricing Mechanisms
As discussed in the prior two posts, these three elements can be combined in many different ways; arriving at the proper combination is part planning, part art, and part trial and error. But assuming you've gotten this far, it still leaves the question of what price to charge?
First, let me state that I've been pricing goods and services for many years and for those of you who like precision and certainty, the pricing process is messy and imperfect. Nevertheless, there are several methods that can be used to establish initial pricing. These tend to fall into two group: tangible pricing and value pricing. Tangible price methods stem from obtainable data. Value price methods require more exploratory efforts. This post will deal with tangible price methods.
To read the full, original article click on this link: Thrice Around the Block: How to Set Prices: Tangible Pricing Methods
