The perceived value of different product offers can be reasonably assessed by ________.

Value-based pricing is a strategy of setting prices primarily based on a consumer's perceived value of a product or service. Value pricing is customer-focused pricing, meaning companies base their pricing on how much the customer believes a product is worth.

Value-based pricing is different than "cost-plus" pricing, which factors the costs of production into the pricing calculation. Companies that offer unique or highly valuable features or services are better positioned to take advantage of the value pricing model than companies which chiefly sell commoditized items.

• Value-based pricing is a strategy of setting prices primarily based on a consumer's perceived value of the product or service in question.
• Value pricing is customer-focused pricing, meaning companies base their pricing on how much the customer believes a product is worth.
• Companies that offer unique or highly valuable products and features are better positioned to take advantage of the value pricing model than companies which chiefly sell commoditized items.

The value-based pricing principle mainly applies to markets where possessing an item enhances a customer's self-image or facilitates unparalleled life experiences. To that end, this perceived value reflects the worth of an item that consumers are willing to assign to it, and consequently directly affects the price the consumer ultimately pays.

Although pricing value is an inexact science, the price can be determined with marketing techniques. For example, luxury automakers solicit customer feedback, that effectively quantifies customers' perceived value of their experiences driving a particular car model. As a result, sellers can use the value-based pricing approach to establish a vehicle's price, going forward.

Any company engaged in value pricing must have a product or service that differentiates itself from the competition. The product must be customer-focused, meaning any improvements and added features should be based on the customer's wants and needs. Of course, the product or service must be of high quality if the company's executives are looking to have a value-added pricing strategy.

The company must also have open communication channels and strong relationships with its customers. In doing so, companies can obtain feedback from its customers regarding the features they're looking for as well as how much they're willing to pay.

For companies to develop a successful value-based pricing strategy, they must invest a significant amount of time with their customers to determine their wants.

The fashion industry is one of the most heavily influenced by value-based pricing, where value price determination is standard practice. Typically, popular name-brand designers command higher prices based on consumers' perceptions of how the brand affects their image. Also, if a designer can persuade an A-list celebrity to wear his or her look to a red-carpet event, the perceived value of the associated brand can suddenly skyrocket. On the other hand, when a brand's image diminishes for any reason, the pricing strategy tends to re-conform to a cost-based pricing principle.

Other industries subject to value-based pricing models include name-brand pharmaceuticals, cosmetics, and personal care.

In marketing terminology, perceived value is the customers' evaluation of the merits of a product or service, and its ability to meet their needs and expectations, especially in comparison with its peers.

Marketing professionals try to influence consumers' perceived value of a product by describing the attributes that make it superior to the competition.

• Perceived value is a customer's own perception of a product or service's merit or desirability to them, especially in comparison to a competitor's product.
• Perceived value is measured by the price the public is willing to pay for a good or service.
• The marketing of a product or service involves attempting to influence and increase its perceived value, which can emphasize qualities such as its aesthetic design, accessibility, or convenience.

Perceived value comes down to the price the public is willing to pay for a good or service. Even a snap decision made in a store aisle involves an analysis of a product's ability to fulfill a need and provide satisfaction compared to other products under different brand names.

The work of the marketing professional is to enhance the perceived value of the brand they are selling.

The pricing of products takes perceived value into consideration. In some cases, the price of a product or service may have more to do with its emotional appeal than with the actual cost of production.

Even a snap decision made in a store aisle involves an analysis of a product's perceived ability to fulfill a need and provide satisfaction.

Marketers who want to influence the perceived value of a product define its attributes in terms of its utility, or the extra benefits and values that the customer expects to get in using it. The perceived utility of many products and services may differ widely even among similar or virtually identical products.

There are five types of utilities that companies aim to create through marketing campaigns for products:

• Form utility is the aesthetic appeal of the physical design of a product. Even a utilitarian product like a frying pan can increase in perceived value because of its appealing design.
• Task utility is the value attached to a service that saves the customer time, effort, or money. Car detailing shops and laundry services offer utility value.
• Time utility refers to the ease of access to a service or product, such as 24-hour service compared to 9-to-5 hours.
• Place utility is the convenience of the location, like a fast-food outlet that's around the corner compared to a restaurant that's 20 miles away.
• Possession utility refers to the ease of purchasing the product. A department store that features online ordering, home delivery, or in-store pickup is aiming for possession utility.

A company's brand is meant to communicate a set of expectations associated with its products or services. That's why a well-established brand can command a higher price than its generic equivalents. Advil and Motrin both contain ibuprofen, but both brands are priced higher than generic ibuprofen.

Luxury goods, however, carry the perception of value to another level with the addition of prestige. The highest value of luxury goods is not associated with their utility but with the prestige that owning and using it entails. The perceived value of a Rolex watch is not based on its functionality but with its image as a mark of personal success and refined taste.

At the opposite end of the scale, some brands are marketed as smart bargains. The perceived value of a product may be its low price in comparison with competitors of equal quality.