Pricing models describe how work is quoted. Pricing strategy is the reasoning that sets the number.
Cost-plus
Work out what it costs, add a margin. Straightforward, and it guarantees the price covers cost — provided the cost is complete, which is where it usually fails. See pricing adequacy.
Its weakness is that it ignores what the work is worth. A job that saves a customer a great deal is priced the same as one that saves them little.
Value-based
Priced on what it is worth to the customer rather than what it costs to deliver.
An emergency repair preventing a business from closing for a day is worth more than the same repair scheduled next week, and the cost is identical. See after-hours and emergency work.
Harder to apply, and it is where the higher margins are.
Competitive
Priced against what others charge. Simple and easy to get wrong, because a competitor's price reflects their costs and their position, neither of which is visible — see competitive analysis.
Penetration and premium
Penetration — deliberately low to win entry, with a stated plan to raise it. The risk is that customers won on price leave on price.
Premium — deliberately high, which only holds if the difference is real and visible — see competitive positioning.
Loss leaders
Something priced at or below cost to win the relationship, on the expectation of profitable work following.
It works where the follow-on work reliably follows. Where it does not, it is simply a loss, and businesses routinely discover the diagnostic or the first visit never converts at the rate assumed.
Price sensitivity
How much demand falls when price rises. Most trade businesses assume it is higher than it is — the evidence is a close rate near the top of the range, which means price is not being tested.
The arithmetic for what a rise can afford to lose is in raising prices.