What is the basic assumption behind value-based pricing?
A)The firm is sales driven.
B)The firm is both customer driven and competitor driven.
C)Increased profitability for wholesalers will increase the number of services they are willing to perform.
D)Consumers are more concerned about price than quality.

Question

Quizplus · Accepted Answer

Value-based pricing assumes that the firm is customer-driven and competitor-driven, meaning that the price is determined by the perceived value of the product or service in comparison to competitors. This approach focuses on maximizing profitability by capturing the value created for customers, rather than setting prices based on production costs or profit margins. Option A is incorrect, as value-based pricing is centered around customer needs and values, rather than sales goals. Option C is unrelated to value-based pricing, and option D directly contradicts its main assumption by emphasizing price over quality.

What Is the Basic Assumption Behind Value-Based Pricing