The price of a product or service is the number ofmonetary units a customer has to pay to receiveone unit of that product or service‘ (Simon 1989).
This was the traditional definition, but in the1990s a broader interpretation of the priceconcept became customary. Illustrative of this
broader view is Hutt and Speh‘s observation that‗the cost of an industrial good includes much more than the seller‘s price‘ (Hutt and Speh 1998)
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers.
Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing.