Pricing:
Understanding and Capturing Customer Value
Price is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service.
Price is the only element in the marketing mix that produces revenue; all other elements represent costs
Customer Value-Based Pricing
Understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value
Value-based pricing uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set.
Value-based pricing is customer driven
Cost-based pricing is product driven