Value based pricing: Difference between revisions
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'''Value Based Pricing''' (VBP), also known as Value Optimized Pricing (VOP), is the practice of setting the price of a product or service based on its estimated value to a specific consumer. This practice effectively gauges how much the consumer values what they are paying for before resorting to a competitor or creating their own solution. | '''Value Based Pricing''' (VBP), also known as Value Optimized Pricing (VOP), or Surge Pricing, is the practice of setting the price of a product or service based on its estimated value to a specific consumer or at a specific time. This practice effectively gauges how much the consumer values what they are paying for before resorting to a competitor or creating their own solution. | ||
==How it works== | ==How it works== | ||
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===Price gouging individual or specific consumer groups=== | ===Price gouging individual or specific consumer groups=== | ||
With specific apps that you buy stuff from may collect your data without your consent. This allows companies to charge more for the same items that you may buy again later on. These apps likely also share this type of purchase history with other providers that share similar products for profit. | With specific apps that you buy stuff from may collect your data without your consent. This allows companies to charge more for the same items that you may buy again later on. These apps likely also share this type of purchase history with other providers that share similar products for profit.<ref>{{Cite web |author=Forbes |title=Are Airlines Spying On You- The Hidden Costs of Surveillance Pricing and How To Avoid Them |url=https://www.forbes.com/sites/advisor/2024/12/09/are-airlines-spying-on-you-the-hidden-costs-of-surveillance-pricing-and-how-to-avoid-them/ |archive-url=https://web.archive.org/web/20250927110156/https://www.forbes.com/sites/advisor/2024/12/09/are-airlines-spying-on-you-the-hidden-costs-of-surveillance-pricing-and-how-to-avoid-them/ |archive-date=27 Sep 2025}}</ref> | ||
===Targeted smart pricing with AI=== | ===Targeted smart pricing with AI=== | ||
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==Examples== | ==Examples== | ||
[[Cloudflare]] charging you higher rates for the same plan as other users. | * [[Walmart]] & Kroger plans of using smart pricing or "surge pricing"<ref>{{Cite web |author=DailyDot |title=Walmart Surge Pricing |url=https://www.dailydot.com/news/walmart-surge-pricing/ |archive-url=https://web.archive.org/web/20251203094358/https://www.dailydot.com/news/walmart-surge-pricing/ |archive-date=3 Dec 2025}}</ref> on its in-person retail products. Walmart denies this claim.<ref>{{Cite web |author=MSN |title=Walmart Is Replacing Its Price Labels with Digital Screens But the Company Swears It Won't Use It For Surge Prcing |url=https://www.msn.com/en-us/money/companies/walmart-is-replacing-its-price-labels-with-digital-screens-but-the-company-swears-it-won-t-use-it-for-surge-pricing }}</ref> | ||
* [[Cloudflare]] charging you higher rates for the same plan as other users. | |||
* [[Doordash]] charging users hidden fees based on how they use the app and what device they were ordering from. | |||
[[ | ==Further reading== | ||
*[[Financial censorship]] | |||
*[[Price fixing]] | |||
*[[Whaling (gaming industry term)]] | |||
== External links == | |||
* [https://pluralistic.net/2023/02/19/twiddler/ "Twiddler. Configurability for Me, But Not For Thee."] | |||
==References== | ==References== | ||