Meeting halfway: Comparison between cost-based and demand-based pricing methods

The research analyses two perspectives of pricing methods - the accounting and the marketing one. The research purpose is to analyse both ways and find out how reasonable price is formed - meaning fairly for both the company and the customer. The literature is analysed and the most important is to stress understanding the power of consumers and their possibility to influence price formation. The analysis was conducted in a part of services, precisely, in focus of the analysis were language schools and courses that they are offering. The field research included three parts: survey method, interview with the owner of one of the language schools in the Republic of Croatia and analysis of language schools' web-pages for the purpose of making a price calculation. The results have shown that for the same offer (class type and number of teaching hours), following the cost-based pricing method, the price is much higher than following the value-based pricing method. The importance of this study is demonstrated in opposites between perspectives and stressing that for survival on market it is crucial to be focused on market research, finding out customers' perspectives and adapting to it.