One of the reason pricing of services is more difficult than pricing of goods is costing.

It is
simple to distribute direct cost to the total unit of good. For example, pricing a can of soda is the
total amount of cost which is easy to identify and divided into the total amount of soda cans.
Manufacturing, shipping, delivery, raw material cost are classified as direct cost. On the other hand,
servicing is mostly based on labour which is extremely hard to recognise and can’t be distribute
equally to the amount of services. For instance, any consulting services is based entirely on labourer
in other word business pays to employee. The process of service may took many procedures and
different employees. Therefore, the cost which is salary payment can’t be distribute equally to the
total amount of services. There are some services that included both direct and indirect cost which is
even more complicated to distribute cost and pricing the services.

Moreover, the pricing of the services could be more complicated compared to the pricing of
the goods due to the complexity of defining the unit or quantity of the service and relates it to the
basis price. Delivery of a services may depend on various perspectives. Some services are more
subjective and it can possibly depend on the quality of the services, the council, the staff’s expertise
and value of time delivered for the service. As an example, a barber shop. The price or value of the
service is just not depends ability to trim or cut a person hair, but it may related to the quality of the
barber’s shop and the skill and expertise to deliver their service on various customer. Plus, energy
use for delivering the services may be vary for each customer and that can bring a limitation for the
maximum output of the service could delivers. The value of any physical or tangible product can
easily be determined by aspect of materials or cost of making the products. Thus, it becomes a
difficult for determining the price of a services compared to the pricing of goods.

Furthermore, the complexity of determining the price of a services could also depend on the
time importance aspect. Most of the services consider the time invested for delivering their services.
Even the same services could have a different value based on its time delivering the services. This
investment of time is an importance aspect for the business to consider their price towards the
customers. From certain perspective, the longer you have been in a business, the service that you
delivers may be more valuable compare to the growing business and competitors. Thus, the price of
the services should also be determine by considering the experiences, trust and business’s
reputation in the industry. Time importance should be consider as one of the price and marketing
strategy as the matter of time could be valuable towards the business and also the customer in term
of saving their minutes.

Last but not least, the difficulty of pricing of services also caused by the customer itself.
Some services’ price may not relatable and absurd from customer perspective. It is a hard effort for a
business to ensure their customer recognize the value of their services. The determination of
services may be well manages. It is completely different compare to the physical product because
the customer could feel, touch and experience product testing before they simply buy the product.
As for the services, it is important how customer would perceived the value before they commit to
the purchase of the services. In order to so, the service provider must first understand their
customers. For example, a service business need to have market study and collect various
information from customers and also from the competitors. They have make sure that they also
understand the details of their potential customers such as on how much are their incomes and how
much are they willing to pay for the services. The prices could not easily be determined by just a
number and profit. In fact, understanding the target customers are considered important in value-
based pricing strategy. Thus, the process of determining a suitable price for a certain services may be
more difficult than the pricing of goods.