Value Pricing

Posted in Operations and Supply Chain Terms, Total Reads: 1070

Definition: Value Pricing

Recently companies have started adopting itself to value pricing in which it tries to win loyal customers by charging them a fairly low price for higher quality product or services. Thus value pricing is not only means setting low prices but it requires lot of re-engineering and improvement in its operation to become a low-cost producer.

All this is done without sacrificing on the quality, thus attracting a large number of value-conscious customers.

A commonly used value pricing known as Everyday Low Pricing (EDLP) which is mostly used in big retails tries to keep the price low for a very low period. This eliminates week to week price uncertainty for the customers thereby boasting customer’s value proposition for that product. 

Eg:  One of the best examples of value price is IKEA furniture store who as kept its prices highly competitive thank to its innovative operational processes and delivery system.


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