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Welcome. We're exploring
value based pricing,
a highly impactful and customer
centric approach
to setting prices.
Value based pricing
involves setting
your product or service
price according to the value
perceived by your
customers rather
than just covering costs
or matching competitors.
This approach requires
understanding your target segment,
their perception of
your product's worth,
and the benefits it provides.
Since value varies
across markets,
this strategy depends on
listening to customers using
market research and developing
a strong value proposition.
Unlike cost plus or
competitive pricing,
value based pricing
focuses on what
your solution enables
customers to achieve.
Determining customer value
involves identifying
and quantifying benefits such
as increasing efficiency,
saving money, or
enhancing experiences.
For instance, in
the life sciences
or medical device industry,
a new diagnostic tool might
command a higher price
if it shortens hospital stays
or improves diagnostic accuracy.
Setting value based prices
involves customer interviews,
conjoint analysis,
or market testing to
identify key attributes
and willingness to pay.
Process is iterative
and requires
ongoing validation as your
market and offerings evolve.
Value based pricing presents
several complexities.
Measuring customer value
can be subjective.
Different segments may
value speed or reliability.
Markets and regulations
can constrain pricing.
For example, healthcare
reimbursement ceilings
