How is price determined in a Service industry?

Jul 10, 2019
 

Many real estate agents have a sharp understanding of how price works with product and goods.  In service industries though, understanding price is much more challenging.  

Intuitively, we know a retailer won’t sell something for less than they paid for it (at least not for long).  But in services, the cost of production is much harder to identify.  For this, we must look at the value of the providers time to arrive at a price to charge.


More importantly, service providers must increase the perceived value of the service in the mind of the buyer, because that’s where the money really is!

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