Task Write on the topic: (50 points) (60 – 80 words) My distric tand my flat

What is a traditional pricing model?

Price strategies are what different companies use to price their products to achieve their profit goals. Price strategies have evolved from the age-old, cost-based pricing to the now popular discount pricing.

Cost-Based Pricing

Cost-based pricing is simple. The company adds up all fixed and variable costs of each product unit and then tacks on a profit percentage margin. Cost-based pricing is an old pricing strategy that involves no in-depth analysis of the market, the consumer or the competition.

Cost-based pricing is not an effective modern pricing strategy because determining unit cost is difficult when it varies with volume. Consequently, cost-based pricing can result in high prices in bear markets and low prices in bullish markets. This result is opposite to what strategic pricing would produce if market conditions were considered.

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