Many people judge the quality of commodity by its price taking higher price as the sign of good quality. Sometimes customers do not have the information about the actual prices of products therefore they judge the quality of product by its price. Such type of behavior compels the sellers to increase the prices of their products despite the fact that the actual prices are low. Customers also carry prices in their minds; such prices are known as reference prices. In order to get higher profits, sellers have to influence the reference prices of the customers.

• Promotional Pricing

Many organizations try to promote their products by lowering down the prices of their products below list price or even cost. Such promotional pricing helps the marketers to attract the more customers in short period of time. However promotional pricing can be dangerous for the organization because it can spoil the overall reputation of organization. Similarly such practices are easily copied by the competitors and do not help the organizations to build their brand in the long run. 

• Geographical Pricing

Companies also charge different prices form the customers living in different parts of the country or world. If the customers are living in distant areas, companies have to charge higher prices to cover the cost of shipment but this will result in the losing of customers to competitors. Therefore it becomes difficult for the company whether to charge the uniform prices through out the country or charge prices according to the geographical conditions in which the customers live.

• International pricing

Many organizations operate in various countries of the world, due to which they have to decide whether to charge uniform prices or sell products according to the situations of the countries in which the organizations operate. There are various factors which affect the price decision of the companies such as consumer perception, economic conditions, law and order situation, marketing objectives of the company etc. These factors help the organizations whether to charge similar or different prices through out the world. For example in many cases organizations charge higher prices from the people living in remote countries because of differences in their per capita income.