ABSTRACT
The price of a company's products and services represents the vehicle for that company to achieve its financial objectives. The important criterion of pricing is problematical to marketers. This is attributed to the uncertainty associated with pricing decisions as it is a complicated area of decision-making. This chapter examines the traditional economist's view of price to illustrate both the shortcomings and potential contributions of this approach as a prelude to discussing more strategic pricing approaches for the decision-maker. The starting point for developing a pricing structure is the delineation of a framework for pricing decisions. A key parameter affecting pricing decisions is customer based. Demand for a product is closely related to how the customer perceives the various attributes of competitive products. The price of competitive products is a key area affecting demand. Cross elasticity of demand is a measure for interpreting the relationship between products.
