The price of a product is the amount of money that would be charged in exchange of that product from the buyer in the market. Price connotes the value attached to the product. The total value of a product is the perceived benefits of the product to a prospective buyer in comparison to its price. Pricing forms one of the factors influencing the purchase decision of a prospective buyer in the market. An effective pricing strategy helps in encouraging initial trials and maintaining customer loyalty. Internal and external factors are involved in the formulation of the pricing strategy. The paper examines different approaches to the same.