Unit Pricing

Posted in Marketing and Strategy Terms, Total Reads: 391
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Definition: Unit Pricing

Unit Pricing or Unit price is Price per unit of product. It gives information about the cost per pound, quart or other units of weights where pounds, quart are the units of measurement.


Purpose of units pricing –

It allows the marketers to come up with avrerage selling price within a product line that includes different sized items.


Formula –

Average price/unit = Total revenue from all the units / Number of units sold


Or,

Average price / unit = (Price of item#1 * % of sales of itme#1) + (Price of item#2 * % of sales of itme#2)…

 

Unit pricing takes into account all the resources used by a particular unit. Hence it takes into account material, labour and overhead expenses.

 

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