Value-Based Pricing and Pricing Strategies
6 important questions on Value-Based Pricing and Pricing Strategies
What are the two disadvantages of cost-based pricing?
- The customer performance needs and what the will pay for the desired level of product performance is not taken into consideration.
- Both competitors' offerings relative to customer needs and price sensitivity are not taken into consideration.
What are the four value drivers of market-based pricing?
- Product performance
- Quality of customer service
- Brand reputation
- Price
What is a penetration cost-based pricing strategy?
- It is used in the early stage of the PLC.
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What are the three determinants of price elasticity?
- Ease of switching
- Supply/demand conditions
- Competitor price response
Why is an break-even analysis useful?
What is the calculation of price and break-even volume?
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