ABSTRACT
An appreciation of cost issues begins at the market and what the end users are willing to pay for a particular product. In a general sense, there are three categories of price points as shown. These may be called economy, market, and premium prices. Effectively, these levels of pricing refer to the customers’ expectations and their willingness to pay for particular goods or services. What the majority of a target market for a business is willing to pay for the offered product is called the market price. This population tends to set the expectation not only for a product's price but also its perceived quality, reliability, and other performance metrics. Associated with the target market, there are two other distinct groups. The first may be categorized as the barging hunters and are drawn to the economy side of pricing. This group is characterized by their willingness to sacrifice some features of a product for a price reduction.
