myz-vgb.ru A Business Encyclopedia

Perceived-Value Pricing

Definition: In Perceived-Value Pricing method, a firm sets the price of a product by considering what product image a customer carries in his mind and how much he is willing to pay for it.

In other words, pricing a product on the basis of what the customer is ready to pay for it, is called as a Perceived-value pricing. The perceived value is made up of several elements such as buyer’s experience with the product, service support, warranty quality, channel deliverables, customer support, supplier’s reputation, trustworthiness, etc.

perceived value pricing

Every company tries to enhance the perceived value in customer’s minds by adopting several marketing mix elements such as advertising, promotion, sales force, etc. Many times, the customer is not aware of the cost incurred by the firm in producing the product, but what they only care is the final price and how much it varies from the competitor’s product.

The company must inform the customers the additional value that their product is offering and for which extra amount is being charged. Such as durability, features, reliability, service, warranty, etc. differentiates one product from the other and the customer is willing to pay extra for these additional benefits.

This method suffers from several limitations; sometimes a customer may suspect that the company has exaggerated about its product quality and services. Also, there is a segment of buyers who are price conscious and do not want to pay extra for a product. The benefit of using this method is only when a company offers more value that its competitor.

Leave a Reply

Your email address will not be published. Required fields are marked *

Shares

Related pages


ansoff matrixcompulsory convertible debenturelaw of diminshing marginal utilityexplain managerial gridspearman's correlation coefficientconcept of arbitragedividend relevancebureaucratic management theory by max webermeaning of job evaluation in hindilease leasebackpersonalities theoriesitr income tax returndefine monetary policy in economicsadvantages of virtual bankingchallenger definitionerg meaningherzbergs motivational theorydefinition of a bridge loanwhat is autocratic leadership in businesswage determination economicstruncation of chequesdelegate hindi meaningwhat are isoquants explain the properties of isoquantse-tailing definitionwritten down value method of depreciationvertical marketing system examplepsychoanalytic theory exampleemployee provident fundsfeatures of an oligopoly marketdefinition markemeaning of arbitrage in financemeaning of payroll in hrwhat is duality in operations researchspearman correlation coefficientsdelphi techniquevirtual lockboxwhistle blowing policy definitionexamples of participative leadersnorming definitiondifference between hire purchase and installment systemasset turnover ratio meaningwho is autocratic leadermeaning of guerilla warfaremethodology of six sigmaprepare a cash budgetwhat is the cash reserve ratiofrontal attack strategy examplerbi acronymmeaning of subscribed capital14 principles of management by henry fayolwhat is retained profitexplain the bases of market segmentationlazy faire definitionethnocentric definedefine pure monopolymarket structures in microeconomicssensitivity training definitionnational pension system nps indiaoutbound campingdelphi technique in human resource planningfred fiedler contingency theorywhat is bell curve method of performance appraisalacid test ratio formulamarginal and total utilitydeclining marginal utilitynormal profit monopolywhat is clr in bankingwhats samplingsubstition methodengineering gate examinduced deffoc socorganizational development in hrmthe law of diminishing marginal utility refers to