Difference Between Price, Cost and Value

Definition of price

The price is the amount of money the buyer pays the seller for any product or service. The amount charged by the seller for a product is the price, including costs and profit margin. For example: If you buy a product for Rs 250, that is the price of the product.

Definition of price cost

Cost: The cost of producing any product, such as land, labor, capital, business, etc. This is the amount of money the company spent on manufacturing a product. For example: If a company manufactures shoes, then the cost of raw materials, salaries, rents, interest, taxes, duties, etc. Costs incurred determine the cost of the product.

Definition of price value

Value is the utility of any product to the customer. It is never possible to determine n amounts of money and it varies from client to client. For example: If you go to a gym spending $ 1,000 a month, the performance you see is worth the expense, the value you create for a gym in terms of the service it offers. Its worth here.

Differences between price, cost and value

• The price is what you pay for the goods or services you acquire; Cost is the sum of the costs associated with the production of the product, and the value is what the goods or services pay for, that is, understand.
• The price has to be quantified, the costs have to be quantified, but the value can never be quantified.
• The price is the same for all buyers; The cost is the same for all customers, while the value varies per customer.
• The price is estimated through pricing policy; Costs are estimated on the basis of the actual costs incurred in manufacturing a particular product, but the estimate is based on the customer's judgment.
• Market ups and quotes affect the price and cost of any product, while the value remains the same.
• Price is determined from the perspective of the consumer; the costs must be determined from the manufacturer's point of view, while the value must be determined from the user's point of view.