Mention two advantages and two disadvantages of cost plus pricing stra

1.	Mention two advantages and two disadvantages of cost plus pricing strategy of product life cycle.
Answer» Two Advantages: 1. It is a safe approach to pricing. It ensures full coinage of cost and helps in achieving a reasonable return on capital employed. 2. The method is logical and can be defended on moral grounds. It discourages cut-throat competition in the market. Two Disadvantages: 1. It is very often difficult to determine accurately the cost per unit due to common overheads and joint products. 2. It fails to reflect competition in the market.

Mention two advantages and two disadvantages of cost plus pricing strategy of product life cycle.

Answer»

Two Advantages:

1. It is a safe approach to pricing. It ensures full coinage of cost and helps in achieving a reasonable return on capital employed.

2. The method is logical and can be defended on moral grounds. It discourages cut-throat competition in the market.

Two Disadvantages:

1. It is very often difficult to determine accurately the cost per unit due to common overheads and joint products.

2. It fails to reflect competition in the market.