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Value-based pricing depends on

A. undercutting the price of competitor products
B. associating product and benefits
C. having loyal customers
D. the cash flow needs of the business

User Joe Morano
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Final answer:

Value-based pricing relies on the value or benefits that a product provides to a customer. A strong brand name can influence consumers to pay a higher price due to perceived value. Overall, in a market with competitive pricing, both businesses and consumers can benefit. The correct answer is option: b) associating product and benefits.

Step-by-step explanation:

Value-based pricing depends on associating product and benefits. This approach to pricing focuses on the value that a product or service provides to a customer rather than simply undercutting the price of competitor products, maintaining loyalty, or aligning with the cash flow needs of the business. For instance, a well-respected brand name that has been carefully built up over many years can justify a higher price because the perceived value to the consumer is greater.

Furthermore, businesses in a competitive market where products are continuously improved upon and offered at decreased costs can benefit greatly. When a company can deliver its services more cheaply, as seen in the example of a messenger company whose main cost is gasoline, it can often enhance both the supply and profitability. Consumers, in turn, enjoy better or less expensive products, leading to a situation where the nation as a whole experiences more gains than losses.

User Ryan Versaw
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