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Cost Based Pricing Vs Value Based Pricing - Template 02

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A business can use different methods to calculate how much to sell its goods and services. One of the more commonly used method is cost based pricing and in this, the costs of production act as a foundation of the price of the product. Another strategy that businesses can use is value-based pricing. In this method, the price is primarily determined by the perceived value of the customer. In cost-based pricing, the main advantage is that the costs of production are surely covered by the selling price. Also, the profit margin is pre-determined so the business can expect returns. Value-based pricing has more flexibility because it is based on brand perception. Businesses can charge higher prices from the beginning. It is important to note that there is no one pricing strategy that is better than the other. Choosing the right pricing strategy depends on the product or service the company offers and what their goals are.

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Cost Based Pricing Vs Value Based Pricing - Template 02

Images | English