The methods to set product prices are (1) markup pricing, (2) target-return pricing, (3) perceived-value pricing, (4) value pricing, (5) EDLP, (6) going-rate pricing, and (7) auction-type pricing.

1. Markup Pricing is a where a markup is added to the product’s cost. The idea is that the markup will generate profit. Markup pricing is dominant in the retail industry with companies such as Walmart and Target (Wang, Lau, & Lau, 2013).

2. Target-Return Pricing is where the price is set at a certain rate that will yield a desired rate of return on the investment. Studies have shown that there are four major objectives associated with target-return pricing: (1) the achievement of satisfactory profits and sales, (2) the service quality related objectives, (3) the financial objectives, and (4) the stability in the market (Avlonitis, & Indounas, 2005). Target-Return pricing can be found in the banking industry with banks such as Wells Fargo and Bank of America (Avlonitis, & Indounas, 2005).