Relation between cost-price-value | Everything about Logistic's
The following pages more fully discuss the issues of cost, price and value. . of customization the stronger the relationship between perceived value and price. Posts about Relation between cost-price-value written by johanneswoe. Price-Value Relationship. the connection that consumers make between price and quality; products with a higher price are commonly perceived to be of better.
That will in turn create happy, loyal customers.
The formula looks like this: At the same time, having a great product at the best possible price means nothing if the customer is treated badly, or not provided with the opportunity to return unwanted items.
Quality is difficult to define, and varies with each consumer, however we can take a look at some of the components of quality for products and services: Products Performance-The product does what it is supposed to do.
Features-The product includes all the specifications that it says it has or that are required, this includes safety measures. Reliability-The product performs consistently.
price-value relationship – Termwiki, millions of terms defined by people like you
Durability-When the product is being used it has to last under the conditions of normal use. Serviceability-The product is easy to maintain or repair either by the consumer or by providing a warranty which says the company will provide repairs. Aesthetics-This is important to consumers, products have to look good, and this contributes to a brand equity and identity. The customer has to have positive feelings about the product, the company, the brand name and the employees.
The reason is that these values are subjective: So we must work on measuring them.
Relationship between Value and Price – Innovation Excellence
Ways to do so include asking consumers how much they would be willing to pay for a basic product and for each benefit added to the offer. Also, the company might conduct experiments to test the perceived value or different product offers.
Two types of Customer Value-based Pricing: Good-value Pricing and Value-added Pricing We will now have a look at two distinct forms of customer value-based pricing.
It refers to offering the right combination of quality and good service at a fair price — fair in terms of the relation between price and delivered customer value. Good-value pricing is mainly used for less-expensive products, for instance for less-expensive versions of established, brand-name products.
Even companies such as Ryanair can be considered to rely on good-value pricing. Granted, they offer much less value — but at even lower prices.
Value and Relationship Quality
Good-value Pricing — Customer value-based pricing Value-added Pricing — Customer Value-based Pricing Value-added pricing, an alternative customer value-based pricing strategy, means attaching value-added features and services to differentiate the product and charging higher prices. In other words, you add features and thereby customer value — and in return you charge more for the value-added product.
To return to our airlines example, take a look at higher-priced premium airlines such as Singapore Airlines, Emirates, Etihad Airways or Lufthansa.
Flying with these airlines will cost you much more — but customers are willing to spend that additional price because they will get more value. Value is added in terms of comfort, luxury, premium service and so further.