What is the basic assumption behind value-based pricing?
A) Consumers are more concerned about price than quality.
B) Additional long-term costs to manufacturers will increase.
C) Increased profitability for wholesalers will increase the number of services they are willing to perform.
D) The firm is both customer-driven and competitor-driven.

Question

Quizplus · Accepted Answer

The basic assumption behind value-based pricing is that the firm has a customer-driven and competitor-driven approach. This means that the firm considers the perceived value of the product or service by the customer and the pricing strategies of competitors to determine the optimal price for their product or service. Value-based pricing assumes that customers are willing to pay a higher price for a product or service that offers them greater benefits or value compared to other products in the market. It also assumes that the firm can achieve increased profitability by offering a differentiated product or service that is priced based on its perceived value to the customer. Hence, option D is the correct answer. Options A, B, and C are not relevant to the basic assumption behind value-based pricing.

What Is the Basic Assumption Behind Value-Based Pricing