pricing policy

The pricing policy is one of the four “P’s” of the marketing mix and includes all measures of a company regarding the analysis, setting and monitoring of prices.

The pricing policy also covers the contracting policy, i.e. decisions on delivery and payment conditions as well as rebates (bonuses) and discounts. In principle, a distinction can be made between cost-oriented and market-oriented pricing policies. In cost-oriented pricing, the costs incurred for a product are used to determine the price. With a market-oriented pricing policy, on the other hand, pricing is oriented towards the behavior of competitors and buyers. Thereby, the determination of the customer’s willingness to pay plays a decisive role. Auctions, price bundling, non-linear prices or demand pooling are examples of pricing policy instruments.