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Pricing Exceptions

In: Practical Pricing

Author

Listed:
  • Michael Calogridis

Abstract

Cost-plus pricing is a mechanism that is used for pricing products in certain industries, for the most part found in companies that do business with the U.S. Federal Government. For the majority of cost-plus contracts (sole source, firm fixed), the governmental entity will allow certain levels of profitability. Once overall profitability rises above the minimally accepted benchmarks, the government will require that the additional profit be returned to the government. The key in this cost-plus world is a strong “price to win” strategy whereby your costs are adequately pegged to the overall competitive marketplace and you can win deals (contracts) because of competitive bidding along with, hopefully, superior technology and serviceability.

Suggested Citation

  • Michael Calogridis, 2010. "Pricing Exceptions," Palgrave Macmillan Books, in: Practical Pricing, chapter 0, pages 127-135, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-10234-7_11
    DOI: 10.1057/9780230102347_11
    as

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