What is the difference between traditional based costing and target costing?

Traditional Cost Accounting System: In this system company first produce the product and then determine the cost of production and then try to sell that product at price covering that cost plus certain percentage of markup on cost.

Target Costing: In this system first of all company determines the value of product in the eyes of customer that is how much a customer is willing to pay for the product and then if cost of production of that product is more then the customer willing to pay then company makes analysis of how they can reduce the cost of production to the level of cost a customer willing to pay by reducing the components of product which is costing towards final price but not giving any value to customer and in this way company tries to acheive the target cost customer willing to pay.

Traditional Cost Accounting System: In this system company first produce the product and then determine the cost of production and then try to sell that product at price covering that cost plus certain percentage of markup on cost.

Target Costing: In this system first of all company determines the value of product in the eyes of customer that is how much a customer is willing to pay for the product and then if cost of production of that product is more then the customer willing to pay then company makes analysis of how they can reduce the cost of production to the level of cost a customer willing to pay by reducing the components of product which is costing towards final price but not giving any value to customer and in this way company tries to acheive the target cost customer willing to pay.