Three Major Pricing Strategies

What is involved in customer value-based pricing?

(Assess customer needs, set price to match customer value, determine costs, design product to deliver desired value at target price) Example, selling beer at a hockey game

What is involved in cost-base pricing?

(Design product, determine costs, set price based on cost, convince buyers of product value) Example, manufacturing oatmeal for grocery stores

What are the three major pricing strategies?

1) Customer Value-Based Pricing 2) Cost-Based Pricing 3) Competition-Based Pricing

What is involved in competition-based pricing?

No clue. Example, Under Armor to Nike

What is cost-based pricing?

Product driven. A company designs the product, adds up the costs of making it, and sets a price that covers the costs plus a profit.

What is competition-based pricing?

Setting prices based on competitor's strategies, costs, prices, and market offerings.

What is customer value-based pricing?

Setting the price based on buyer's perception of value rather than seller cost