Price
Also called: cost, rate, purchase price, value or costs
Price is the size of the payment required (usually in money) for a customer to take ownership of a product or be provided with a particular service.
How expensive something is is determined by a combination of several factors:
- Cost of the product (raw materials, resources and labor);
- The recommended price, based on the supplier's target margin;
- The market value determined by:
- Availability (low supply in the market often results in a high price);
- The price charged by competitors;
- The amount customers are willing to pay for a product or service.
For items on a store shelf, the fixed price is stated on the shelf or on the products. In other forms of sale (or rental), the price to be paid is set out in an offer or purchase agreement, for example. In this case, there is often some form of customization from the supplier, which may include some room to negotiate the price in advance.
Price is one of the P's in the marketing mix.
