In value-based pricing, a product with high quality and low price is perceived as high value. This is because the product offers more benefits or superior features compared to its cost, making it attractive to customers. This can lead to increased sales and customer loyalty. However, it's important to ensure that the low price doesn't lead to perceptions of low quality. Also, the company must ensure that the price covers costs and generates a profit, otherwise, this strategy could lead to financial losses.
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For instance, a product with high quality, but low price is super high value. But a product with low value and high cost is a rip-off. Execs should perform this assessment for their products as well as their competitors to understand the broader market landscape. The strategy in this visualization is value-based pricing, and the goal is to position products based on their perceived place in the market relative to the competition and find a competitive edge.(Slide 3)