Price,Cost based Price,Value based Price

What is price & also brief cost based price and value based price?

Price is the amount of money which includes cost plus profit.

Price = Cost + Profit

So the offered money against which, we are going to purchase some product is known as price. We can take same example over here, that the sum of all expenses incurred on the car is become the total cost of the car. Let’s say total cost of a car is 100,000. Now company may sell this car at the price of 150,000. Now we can write it as;

150,000 = 100,000+50,000

Price = Cost + Profit

Value based pricing is a business strategy. It sets selling prices on the perceived value to the customer, rather than on the actual cost of the product, the market price, competitor’s prices, or the historical price.

A cost-based price is the cost of producing a unit of the product plus a certain margin.

A value-based price reflects the value of the product to the customer.

I think these terms are clear in your mind now. But still if you want to clear any point, you are most welcome.