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And trying to beat competitors on price alone is a cut-throat business, very risky and not recommended. It attracts bargain hunters ready to defect to competitors for a better deal.
Using a value-pricing strategy is a better proposition because it attracts loyal customers. Why do customers buy designer-labelled clothes and luxury cars? Why are those items more expensive when they don’t cost so much more to make? The answer lies in the perceived value. Value is not an inherent attribute of the product but it commands a higher price.
Customers do not buy features and benefits, they buy VALUE.
Value is subjective. Value is a benefit but a benefit is not necessarily of value to all customers. For example, a vendor offers free installation and free updates for his software.
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