Value-based pricing is a strategy that uses the value customers gain from the product or service as the basis for the co

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This strategy works well when your product or service is innovative and can’t be easily swapped with an alternative.

The early years of iPhones are a great example of this: the cost to manufacture the phones is significantly less than the market price, but because none of the existing smartphones at the time had similar functionality, Apple was able to set a high price and establish what the “value” of touch screen smartphones was.

Value-based pricing can also be used when your product or service is list of armenia consumer email significantly better than alternatives that can accomplish the same function.

For example, the true cost of production for software development is really minimum wage for the developer plus the cost of the equipment and software involved in the development process. However, app programmers are paid more than that because they have a highly desirable skill set and hiring someone else to do the work is more effective and efficient than learning to code and trying to create an app by yourself.

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6. Time-based pricing
A time-based pricing strategy is typically used by companies whose product or service has high seasonality or last-minute purchases. Airlines exemplify this: it’s more expensive to book flights during peak seasons and cheaper if you’re traveling during off-seasons. Additionally, the closer you book to the travel date, the more expensive the ticket will be.