Definition Of

Cost-plus pricing

Adding a standard markup to the cost of the product is called is cost-plus pricing (or markup pricing).  Construction companies, for example, submit job bids by estimation gather total project cost and adding a standard markup for profit. Lawyers, accountants, and other professionals typically price by adding a standard markup to their costs. Some sellers tell their customers they will charge cost plus a specified markup; for example, aerospace companies often price this way to the government.

Share it:

More from this Section

  • Opinion leader
    A people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others.
  • Retailing
    Retailing refers to all the activities which are involved in selling products or services directly to final consumers for their personal, non business use.
  • Consumer promotions
    Consumer promotions - sales promotion tools used tools to boost short-term customer buying and involvement or enhance long-term customer relationships.
  • Customer-centered company
    Customer-centered company refers to a company that focuses more on customer developments in designing its marketing strategies...
  • Competitive-parity method
    Competitive-parity method is a method that refers to set their promotion budgets to match competitors’ outlays. They monitor competitors’ advertising or get industry promotion...
  • Adapted global marketing
    Adapted global marketing refers to an international marketing strategy that adjusts the marketing strategy and mix elements to each international target, bearing more costs...
  • Sales quotas
    Sales quotas refer to a standard that states the amount a salesperson should sell and how sales should be divided among the company’s product.