Introduction

All of profit and nonprofit organizations has to set prices on their services and products. Price goes by various names (rent, fee, fare, tuition, rate, toll, premium, interest et cetera). Price is the amount of money charged for a service or product or the sum of the values that consumers exchange for the benefits of using or having the product or service.  In history, price has been the chief factor affecting buyer choice.  Recently, however, nonprice factors have become increasingly significant in buyer-choice behaviour. Throughout history, prices were set by negotiation among buyers and sellers. Fixed price policies: - setting of one price for all buyers is relatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century. Nowadays, we can be returning to dynamic pricing charging different prices depending on the specific situations and customers. The Internet is helping to tailor products and prices. It should be remembered that price is only element in the marketing mix that produces revenue; all of other elements represent prices.  Price is also one of the most flexible of elements of the marketing mix. It has been stated that costing and price competition is the number-one problem facing various marketing executives. Various companies do not handle pricing well.  Common mistakes that they make are following:

1.   Pricing is too cost-oriented.
2.   Prices are not revised often sufficient to reflect market changes.
3.   Prices don't take into account the other elements of the marketing mix.
4.   Prices are not varied for different type of products, purchase occasions and market segments.

All of the profit organizations and various nonprofit organizations have to set prices on their services or products. Price goes by various names Price is all around us. You have to pay rent for your apartment, tuition fees for your education, and a fee to your dentist or physician. The, railway, airline, taxi and bus companies charge you a fare; the local utilities call their price a rate; and the local bank charges you interest for the money that you borrow.

In the finest sense, price is the amount of money charged for a product or service. More generally, price is the sum of all the values which consumers exchange for the profits of using or having the service or product. In history, price has been the main factor affecting buyer choice. It is still true in poorer nations, amongst poorer groups, and along commodity products. Though, non-price factors have become more significant in buyer-choice behaviour in recent decades.

In most of history, prices were set by negotiation among sellers and buyers. Fixed price policies-setting one price for all of the buyers-is a comparatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century. Some one hundred years later, now, the Internet promises to reverse the fixed pricing trend and take us back to period of dynamic pricing-charging of different prices depending on individual situations and customers. The Internet, corporate networks, and wireless setups are connecting buyers and sellers as never before. New technologies permit sellers to gather detailed data regarding customers' buying habits, preferences-even spending restriction-so they may tailor their prices and products.