Chapter – 9
Pricing Of Services
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate