Value Pricing : Value pricing is a modern innovative and individual method of pricing. Value pricing rests on the principle that the reason of pricing is not to recover costs, but to just capture the value of the product retained by the customer. Analysis will willingly show that the following scenario is possible with the cost value price chain.
Value > Price > Costs Price > Value > Costs Price > Costs > Value Price > Value > Costs
Under Scenario following are the issue:
A. Marketer recovers costs through cost, but not succeeds to recover the value of his product.
B. He recovers his costs along the value.
C. The value that he passes on to the customer is yet lesser.
D. He matches the value and price and wins customer loyalty and since the value created is larger than his costs, he ensures his profits.