Friday, November 30, 2012

Pricing Strategy Based on Customer Value

With value based pricing approach, many companies managed to build a better pricing scheme and better understand each other what makes consumers willing to reach into pocket.

Various challenges faced by the company, there are several ways to overcome barriers to determine the pricing policy .

I think companies should focus on three things as below:

1. Focus on Customer Value In this case, the company should not put too much emphasis on product.

Features that or just on the price of these products, but more importantly, the company should be more focus on a variety of benefits, whether functional or emotional benefits that can be received by the customer of the product.

2. Provide Differentiation In Products And Services Products or services that the company should have a higher value than competitors.

If not, then the company would be stuck in a situation where the company will be forced to play the price war. This would effectively destroy the ability of companies to set premium rates.

This means that if a company can not make a differentiation that company will have difficulty in setting the price based on the value or benefits that can be provided.

3. Understanding and Communicating the Value Potential All Sources In order to perform value-based pricing is well, then the company should understand the value or benefits received by the customer.

This means that companies must be able to understand what the customer wants and needs.
If the company already understand this then the next thing is to communicate the benefits of the product to the customer that the customer's product consumption has benefits for himself.

Even worse if the benefits of these products exceed the expectations of the customers, it will likely create a loyal customer.

So by using a value-based pricing, customers will benefit from it (products or services), and other than that value-based pricing also has the ability to produce products or services that are superior to competitor products.

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