Value Based Pricing Case Study

5. Value-based Pricing: Also known as the Value-optimized pricing, it is a pricing strategy which sets prices primarily, but not exclusively, according to the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices (Wikipedia). Where it is successfully used, it will improve profitability through generating higher prices without impacting greatly on sales volumes. The approach is most successful when products are sold based on emotions (fashion), in niche markets, in shortages (e.g. drinks on a hot summer day) or for complementary products etc. Due to modern pricing software and pricing systems and the ability to capture and analyze market data, more and more

Premium decoy Pricing: This is a pricing structure which sets prices in conflict with one another internally in own set up. In this pricing, one can price any product or a service at a slightly higher price to encourage sales of a lower valued product and as marketing research has shown, the results of this type of pricing are surprisingly superlative and consistent, for e.g. in dental clinics which have a target group of lower and middle strata of patients who can’t afford Zirconia crowns but also try to skip to Metal crowns can be shifted to PFM crowns via this type of pricing. This type of pricing effectively implements price pointers, thereby increasing overall volume of sales. We dentists can particularly use this pricing strategy as we usually have more than one product or service on offer for our patients and we can set a price that maximizes our conversion rates from Metal Crowns to PFM Crowns and Zirconia Crowns also to PFM

Premium Pricing: A premium quality product or a service can be used to set its value artificially high in an attempt to encourage a favorable audience perception, something that will be the USP (Unique Selling Proposition) of our setup. Later, if the services or products begin to establish a reputation for quality, this is a great pricing strategy to implement.

13. Price Leadership: A point at which the practice or business becomes self-sufficient to be able to dictate prices within the marketplace. As such, it is an ideal goal to aim for and will work best for businesses operating in industries where competition is scarce.

14. Loss Leader: Loss leadership involves selling a product at a low or even loss-making price. Although there might not be a profit on selling that product or service, but the clients could be attracted to buy other more profitable options because of the reputation of being on the lower side of the pricing. This strategy can usually backfire and we can end up making big