Pricing Marketing Guides
Pricing Strategy
| |
Relative price is the price of something compared to something else. In other words, it is the ratio of two prices. Completely logical people will make purchasing decisions by considering the relative prices of their options. The following are illustrative examples.
ProductsIn apple season, apples cost half as much as oranges. In orange season, oranges cost half as much as apples.ServicesA local carpenter with high ratings and stellar recommendations costs 35% more than a carpenter with mediocre ratings that includes a few complaints.EntertainmentA night out at the movies costs 1/4 the price of a night at the opera.InvestingA stock with a price-to-book ratio of 2 might look cheap in a market where the average price-to-book is 3. However, if the average price-to-book drops to 0.66 a price-to-book of 2 may start to look expensive.|
| Type | | | Definition (1) | The price of something compared to something else. | | Definition (2) | The price of something compared to all available alternatives and substitutions. | | Related Concepts | |
Pricing
This is the complete list of articles we have written about pricing.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
