Price: Understanding and Capturing Customer Value

mix before deciding on a marketing

program. Cost-plus pricing is the simplest

form of pricing, which is adding an

additional price (profit made) to production

costs. Businesses using value-based pricing need to discover the value buyers offer to

various competitors. However, it is often

difficult to measure the customer value

associated with a product. For example,

calculating the price of spices in a luxury

restaurant is relatively easy. But assigning

value to other satisfactions such as taste,