"Assalamualaikum and good day, students!

Today, let’s talk about three main methods of pricing that businesses use to set the right price for their products or services. These methods are important so companies can make profit, attract customers, and stay competitive in the market.

'

🔹 1. Cost-Based Pricing

This method starts with how much it costs to make the product. Then, the business adds a profit margin.

🧾 Example: A bakery in Malaysia makes a cake for RM20 (including ingredients, labour, and electricity). They add RM10 as profit. So, the price to customers is RM30.

This method is simple and ensures all costs are covered.

🔹 2. Competition-Based Pricing

Here, the business sets its price based on what competitors are charging. This is useful in a market where many businesses sell similar products.

🧾 Example: If McDonald’s sells a burger at RM8, KFC might price their similar burger at RM7.90 to attract more customers.

This method helps a business stay competitive.

🔹 3. Value-Based Pricing

In this method, the price is based on how much value the customer thinks the product is worth — not just the cost.

🧾 Example: A customer may be willing to pay RM200 for a high-quality batik shirt made by a local artisan, even though it only costs RM50 to produce. Why? Because of the unique design, brand image, and quality.

This method focuses on customer perception and brand value.

So remember students — pricing isn’t just about numbers. It’s about strategy! Depending on the situation, a business may choose any of these methods to ensure success.

Thank you, and let’s continue to explore how pricing plays a big role in marketing!”