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Customer oriented or perceived value pricing
There is an increasing trend to price the product on the basis of the customer's perception of its value. This method takes into account all other elements of the marketing mix and the positioning strategy of the firm as the value of the product is a function of all these variables. This method helps the firm in reducing the threat of price wars.
In fact, it can help the firm steer out the ugliest of price wars. But the key to this method is to correctly understand customer's perception of product value and not to overestimate the firm's product value. Marketing research can play an important role here.
Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and discuss their financial and other objectives).
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Illustration: ABC analysis Combine items on the basis of their relative value to form three categories—A, B and C. The data in the table below illustrates the ABC analysis.
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