Lesson 15: Packaging, labeling and costing of food products
Pricing
Pricing is the process through which a producer determines the selling price of the product. Pricing is done on the basis of cost of production, price of the same products or similar substitutes in the market and extent of profit that the producer wants to make by selling the products. Both costing and pricing are used to decide the minimum that can be charged in order to optimize profit without driving customers to competitors. The difference between the selling price and cost price is called the margin
Pricing decisions are extremely important since they directly influence the profitability of an enterprise. Some of the factors that should be taken into account while determining the price of a product are:
The selling price of the same product in the market
