Price is the value of the goods or services. According to Kotler, "Price is the amount of money charged for a good or service. More broadly, the price is the sum of the values having or using the product or service." It includes their sacrifice, effort or money. Price determines profit and loss. A pricing mistake can lead to a business failure, eve when all other elements of the business are sound.
Price is the perceived value that is exchanged for goods or services. The perceived value is expressed in terms of money such as dollar, pound or rupees,etc. Price can be anything with perceived value not just money. Price has various names and meanings:
Interest - Paid for the use of money such as Bank charge
Tarif - Price paid to receive service such as import tariff, hotel tariff, air tariff, etc. It is also related to government tax.
Rent - Paid for the use of facility, equipment such as house rent, furniture rent, land and building, etc.
Commision - Price discount paid for serice such as sales commission, broker's commission etc.
Fare - Cost of transportation such as airfare, rail fare, bus fare, etc.
Wage and Salary - Paid for services of workers
Taxes - Price paid for the privilege such as income tax, import tax
Fee - Paid for the services of professionals tuition fee, consultancy fees etc.
Pricing in Tourism
Pricing in tourism is very complicated subjects to deal with as tourism is managed at a different level by different organizations with different organizations. Government fixes the price of visa, national park entrance fee, conservation fee. Their pricing policy is more demand based, and is government policy.
Tourism business organizations fix their prices by different names, such as rate, tariff, service charge, etc. Some business organization follows pricing policy as:
It is important for tourism manager to have a clear understanding of pricing system and tourism system and learn to relate both of them into practice. To set a floor of consumer perception of the product's value is the basic principle of pricing tourism service or tourism product.
Some basic points to be understood while discussing the price in tourism are:
Tourism product has time value and $ value. Time value is the time it takes to arrive at the points of service. and time, duration to consume the service. Price complaints and price bargain are most frequent in tourism industry.