Answer questions Essay Example | Topics and Well Written Essays - 2000 words

Answer questions - Essay ExampleValue based pricing focuses on the usability and value a product adds to the life of the consumer. Rather than fixing prices with the intention of covering the cost incurred in production of a product, a union fixes the price depending on the value it adds to the consumers life. Value freighter be measured in terms of increased efficiency in conducting business activities, improvement in general standards of living and other qualitative measures. Examples of businesses that use this scheme include software companies and producers of medical products. be a computer and electronics company that seeks to solve the computing needs of our clients, we use the value that the product adds to the lives of our clients to make up how much it is worth. The company also produces a number of personalized software products for its clients. This is a good strategy because rather than concentrating on the metrics in terms of cost of coming up with a product, the co mpany is more concerned with the utility that a client derives from it. It makes no sense for a customer to commit for a product just to cover the cost of producing it while it adds no value to his/her life.Traditional approaches of penetrating the market favor charging a low price for a product when a business opening move is initially entering into a market niche. Chances are high that there were previously existing businesses on the market before it came in and therefore, charging lower prices may capture the attention of the target market. Once it has found a reliable customer base and gained ground in the market, it should take advantage of strategies such as increasing prices or large-scale production to boost profits. This is effective in countering competition especially because of the on the face of it low profits.Skimming on the other hand favors charging high prices for products as they are being introduced into the market. The important aim