A pricing method that is based on the costs of a product or service.
To determine a price, following this pricing method, a fixed sum or a percentage of the total cost is added to the cost of a product. This sum results in the selling price.
Selling price=Total Cost of Product + Profit margin
This term implies the understanding of the value that consumers give to the benefits they acquire from some product or service, it is important to consider it, since it also influences the setting of an adequate cost for the good.
The Sales Glossary is a compendium of all the most commonly used terminology in sales strategy. Many of the concepts listed here are used when implementing a CRM system or a digital sales funnel, no matter if they are legacy systems or an online CRM. See also our blog that deals with sales techniques, marketing and sales culture.