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1.Value based pricing- In consumer electronics, medicines and desioreable goods value based pricing is prefereable as the product may offer multiple benefits or have improvements over the offerings from competitor. So, a price differentiation can be made due to a product having better price to performance ratio.
2.Cost-based pricing- Especially in the service industry and even govt tenders, there is a price range-between maximum and minimum. Any thing above the budget won't be acceptable irrespective of the value proposition. The manufacturing and production costs are taken into consideration while deciding the maximum and minimum price.
3.Competitive pricing- Pricing equilibrium is taken into consideration. The products and services offerd by competitors and pricing in the industry has to be considered. Unlike the above two, the value proposition and production costs are not the chief determinants here. Works best for e-commerce.
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