Milt owns a lawn care business. From experience, Milt has found that John Deere equipment lasts almost twice as long as competitors' machines. For John Deere, Milt's perception about its products makes pricing a logical choice.

Milt's perception about its products makes cost of ownership pricing a logical choice.

Explanation:

Cost of ownership pricing method means the consumers like to pay for the product based on the value of the product's useful life. The cost of owning a John Deere equipment is compared with the cost of owning the competitor equipment and then the pricing is calculated accordingly.

The factors involved in this type of costing methods are performance based, incurred costs and policy factors. Here the John Deere equipment has a life and performance better than the competitors.

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