Value-Based Pricing Definition
Value-based pricing is a pricing strategy that relies on the buyer’s perception of the product’s value, rather than the actual product costs. This approach considers the product’s quality, features, and benefits, as well as the competitive landscape and the value it provides to customers. By focusing on the perceived value of the product, companies can set prices that reflect the value that customers are willing to pay, instead of basing the price on the cost of production. Value-based pricing aims to increase profits and market share by offering products that customers perceive as a better value, rather than simply competing on price. This approach requires a deep understanding of the customer and the market, as well as the product’s unique selling proposition.
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