Price is the most visible cost of any purchase. List the seven types of non-price life-cycle costs. How can an understanding of these costs enable a business to charge a higher price than the competition?

What will be an ideal response?

The seven types of non-price life cycle costs are:
(1 ) acquisition costs
(2 ) financing costs
(3 ) holding costs
(4 ) installation costs
(5 ) usage costs
(6 ) repair/maintenance costs
(7 ) disposal costs/value
A company will tend to remain focused on price until it begins to understand how customers acquire, finance, use, maintain and dispose or re-sell its product when compared to competing products. As you look deeper into the costs of ownership, you will likely find opportunities for good customer savings and value creation. For example, in a highly price-competitive market, a company can work at lowering the non-price life cycle costs compared to competitors. Thus, a business may be able to charge a higher price and still deliver a greater economic value to customers.