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Why the Highest Price Is Not the Best Price?

In: Business and Management

Submitted By ozozzu
Words 1222
Pages 5
Why the Highest Price is not the Best Price?

It is about how to practice ‘value based pricing’ that support profits and promotes better relationships wth customers
Accoring to them Value based pricing means finding out what the value is your offerings realtive to competitors and then charging as high as they can
But t,s value based pricing usually shortsighted in 2 respects:
1)It does not consider the profiting from delivering superior value that may result in greaterprofitability
2)It weakens customer relationship
Resim fiyatkasa temalı

CASE:Electron Instruments manufactures scanning electron microscopes (SEMs).In 2007 as a new initiative Electron developed and introduced a desktop SEM They believed this desktop SEMs vastly superior to the next best alternative Japenese,but they did not conduct any customer value research their belief based on qualitative feedback from a few beta tes customers who were familiar wth SEM technology and most of them was the top customers of expensive SEMS They decided to sell these SEMS %25 higher then the price of the next best alternative. But the sales were not as good as they thouht So because of these poor results they decided to investigate what cause that.Marketing discovered that even they were not wrong about easy use of desktop SEM sor technological properties but their prospective customers did not evaluate them at the same way.Furter marketing discovered the close systme design whşich doesnt allow upgrades such as adding a key analytcal system was a negative thng fort he experienced desktop SEM users.Prospective customers upgrading from optical instruments did not find desktop SEM user firendly although itwas technically superior they were unaccustomed to the difference.
Obviously, companies want to avoid scenarios like this. Not only that, they want to be able to determine price points that not only

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