Tuesday, 3 January 2012

Break Even Pricing

Break even pricing is setting the price of a product on the costs of making and marketing the product. It is a good companion pricing strategy to market penetrating pricing. It allows for people to buy and create demand for a new product in bulk and can help foster the spread of knowledge about a product.

This strategy is also good for meeting goals. After setting a goal a product can be priced to meet or break even on a goal with no need to over or undershoot the goal.

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