Pricing strategy refers to the method businesses use to set the prices of their products or services. This strategy considers various factors, including production costs, market demand, competition, and customer perceptions. The goal is to find a price point that maximizes profits while remaining attractive to consumers. Different types of pricing strategies exist, such as cost-plus pricing, where a fixed percentage is added to the cost of production, and value-based pricing, which sets prices based on perceived value to the customer. Companies may also use penetration pricing to enter a new market by offering lower prices initially to attract customers.