Question

Defend ONE of the following statements:

• Prices should reflect the value consumers are willing to pay.
• Prices should reflect only the cost of making a product or delivering a service.

atleast 350 words, no plagarism and also references please. give a different answer not same as in chegg

Answer 1

I believe that the prices should be set based on the brand value of the company. What this would mean is that for a company with higher brand value, the better form of implementation would be from setting the prices based on what the customers are willing to pay for the product or service based on their perception. While for a relatively newer company, a better implementation would be to set the price based on the processes itself rather than what the customers are willing to pay for the product in order to create a more secure outlook for them. Although the above is not always true and there would sometimes be a larger variation between the best and the worst case scenario, we still need to maintain a consistent outlook to determine what makes the best pricing and placement process. On one hand, the customers would recognize more value when they have the correct perception of the value of the product and therefore they value they are willing to pay would be justified while on the other, having a consistent pricing based on the product itself would make sure the company can turn the most amount of profit from it in its life cycle.

If I have to take a stand for one or the other process, I would personally price the [product based on what the customer is willing to pay and the aspect of its value in their mind. This is because it will allow us the ability to create a better understanding between our customers and us and also, by bringing in a rather unique value to the product, we can get a more open pricing model for us to operate with. setting the price based on the product and the delivery, even though easier to implement, does leave the potential to not be approved or appreciated by the customers if they cannot justify the aspect of price to value they get from their purchase.
Setting the prices according to the customers is also beneficial in creating the required outlook for the process of customer engagement which is what the company should seek if they wish to create a more sociable point of future for themselves.