12/13/2023 0 Comments Examples of value based pricingIn answering the second question, we would also want to use the break-even analysis that we discussed in the previous section, as well as other financial and strategic analyses. In order to answer these questions we need to consider both customer- and competitor-related factors. What is the highest price I can charge and still make the sale?.Still, value-based pricing is not altruistic. Price represents everything about the product.Price is the easiest marketing tool to copy.To the customer, price is the only unpleasant part of buying.Marketers who employ value-based pricing might describe it this way: “Price is what you think your product is worth to that customer at that time.” This approach regards the following as marketing/price truths: If we consider the three approaches to setting price, cost-based pricing is focused entirely on the perspective of the company, with very little concern for the customer demand-based pricing is focused on the customer, but only as a predictor of sales and value-based pricing focuses entirely on the customer as the determiner of the total price/value package. It bases prices primarily on the value to the customer rather than on the cost of the product or historical prices determined by competitors. Value-based pricing brings the voice of the customer into the pricing process. The most important perspective in the pricing process is the customer’s. We have discussed common company objectives that affect pricing and the competitive impact on pricing. Describe the benefit of value-based pricing for customers.
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