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Performance-based pricing increases the risk of the seller but it creates opportunities for greater rewards. Sellers who use this pricing strategy have an advantage in attracting customers. Performance-based pricing has fewer chances to work if the desired outcome is not clearly defined and quantified between the two parties. [19]
Volumetric pricing requires metering that can be expensive to implement, especially in the case of irrigation, alternatives include: [2] [3] [4] flat rate; per-area pricing, coupled with tiered pricing; a system of water rights or quotas; input pricing as a percentage of the cost of certain input(s), e.g., seed;
Repricing can be either competitor-based or value-based. While the former often increases revenue, it is also likely to cause price erosion. In contrast, value-based pricing tries to avoid a race to the bottom, by focusing more on the bottom-line margin. [11] There are several technology companies that specialize in repricing and pricing ...
Gender-based price discrimination is the practice of offering identical or similar services and products to men and women at different prices when the cost of producing the products and services is the same. [52] In the United States, gender-based price discrimination has been a source of debate. [53]
Value-based pricing: (also known as image-based pricing) occurs when the company uses prices to signal market value or associates price with the desired value position in the mind of the buyer. The aim of value-based pricing is to reinforce the overall positioning strategy, e.g., premium pricing posture to pursue or maintain a luxury image.
The method aims to guide businesses on how to best price a product or service. The EVC process enables businesses to capture more value than a traditional cost-plus pricing strategy. Companies can leverage the method to estimate the value a customer derives from purchasing a product or service.
Good–better–best pricing takes advantage of consumers' anchoring bias; for example, when Williams-Sonoma sold a bread machine for $279, then introduced a premium bread machine for $429, the premium machine did not sell well, but the original model's sales almost doubled, because customers reasoned that the $279 model was a better value. [3]
Value-based price, also called value-optimized pricing or charging what the market will bear, is a market-driven pricing strategy which sets the price of a good or service according to its perceived or estimated value. [1]