Name: Eliakim O.

Magsayo Section: MAR-201

Student ID: 2020-130228 Course & Year: BSBA-MktgMgt 2020-2021
Date: September 11, 2021 Professor: Torre W. Dalilis

Pricing Strategy
Activity No. 3

Importance of Value-based Pricing

Instructions:

Click the Article link below. Read and understand the article. Create an essay answer, minimum of 3
short paragraphs.
In your own words and explanation, list 3 things/learnings that you like most. Make your work simple
yet clear and concise.

Article Link: https://www.bigcommerce.com/blog/value-based-ecommerce-pricing-strategy/#what-is-

value-based-pricing

There are numerous products and brands in the market and customers are able to compare and
contrast. Besides, customers has distinctive perspective; some want cheaper regardless of material,
some desires expensive with great materials and vice versa. It is absolutely depends on the company
and customers believe they suits in.

There are three (3) types of Pricing Strategy companies execute. Cost-Plus Pricing Strategy,
disregards customers perspective. In most cases luxury brands use this as a method and price higher
more than the mass can afford, as they establish customers how to perceive their worth and value
despite of the price, customers still make a purchase. Mostly, those who are in the upper classes.
Some below the upper classes make purchase to fit in. Competitor-Based Pricing, relies what price
similar companies have published for their products. This is what most businesses use as a pricing if
the companies have similar value of raw materials. Going below can lead to zero revenue and going
beyond can lead to no sales at all, since, the other prices are lower. This is primarily seen with similar
products but different brand like Nike and Adidas Shoes.

Lastly, Value-Based Pricing, not losing money and customers. This is distinguish as the best
mechanism. As it involves the best communication tools with the customers. Such as with the use of
MailChimp’s creative personas, sketches of hypothetical buyer identities. Survey Monkey, build
questionnaires for feedbacks. Facebook Audience Insights or Google Analytics Audience Reports,
see the type of people that are visiting the site. Max Diff Analysis, better way of asking customers
preferences and Van Westendorp’s price sensitivity meter, determine price would consider to be so
expensive, so low that would feel the quality couldn’t be very good, consider product starting to get
expensive and consider product to be a bargain.

Technology do really took a huge impact to companies and customers relationship to be able to
execute value-based pricing. It is often apply to known brands here in the Philippines like Jollibee and
more that meets the “pasok sa pang masa.” Countless of tools can be able to make use that
negotiates with customers and able to understand more your target market. We should really make
use of it as it helps firms do and serve better to gain loyalty, customers retentions and expansion of
the business in the near future as it is the fundamental goal of firms.

Three (3) Things/Learnings I like the most

1.Choosing the right pricing is necessary subject to what type of businesses I am planning to develop.
2.Importance of Value-Based Pricing, is able to meet the desire profit and customers desire which
make a great balance.
3.Through pricing, I can able to perceive customer’s my brand worth and value.

References

https://www.ijbmer.com/docs/volumes/vol6issue3/ijbmer2015060302.pdf
https://www.campaignasia.com/article/philippines-top-local-brands/445921