Value-based pricing is a standard marketing strategy where the prices of a commodity are quoted based on the perceived value of the product or service instead of its historical value.
This strategy is mainly utilised to increase revenue by increasing the price and keeping the volume constant.
*The first step towards determining value-based pricing is to focus on a particular segment. In this stage, one is advised to focus on a particular segment. A value-based pricing strategy can only be used in the case of specific segments.
*The third step towards implementing the value-based pricing strategy is to realise the difference in the value.
*As value-based pricing defines the right value of a product, it develops the actual willingness of customers to pay whatever amount that the brand has quoted.
*The value-based pricing strategy does not work with products that do not have competition or alternatives already existing in the market.