Value-based Pricing in Contemporary Marketing
Keywords:
Value-based Pricing, Customer Peived Value, Contemporary Marketing, Customer Co-CreationAbstract
Abstract
It could be said that contemporary marketing focuses on customers and markets by connecting transactional marketing to relationship marketing using a modern information system to reaching consumers from all over the world by the variety devices via online channels in an interactive way. Many approaches of pricing strategy are often used to establish the suitable price for a product or service to satisfy customer. However, it not easy to determine how much they value the product or service they are buying in their point of view. Value-based pricing regarding on customer perceived value must be adopted to figure out how much the customer values a product or service and pricing it accordingly. Deciding how much to charge for a product requires more thoughts to ensure that customer perceived value is worth or higher than the cost they pay. By reviewing, studying and analyzing the relevant academic literatures above, the value-based pricing regarding on customer perceived value in contemporary marketing can be achieved by combining 3 guidelines approaching which are 1) setting prices to meet customer needs, 2) setting prices to attract customers, and 3) setting prices to suit the nature of products or services. These 3 guidelines must be considered together with other factors including business internal factors: such as organizational factors and goals of the business, cost of the product and service, product differentiation, the other elements of the marketing mix, etc. and business external factors: such as price elasticity of demand, suppliers, competition, economic condition, government laws and regulations, and even unexpected situations, etc.
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