Value Based Pricing

VBP (value based pricing) also known as VOP (value optimized pricing) is a practice where a business sets a price of a product or service based on it's estimated value to a specific consumer. This practice effectively gauges how much the consumer values what they are paying for before switching to a competitor or creating their own solution.

How it works

How the practice works.

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Why it is a problem

Artificial price raises

Targeting consumers on an individual basis

Targeted smart pricing with AI

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Point 1

Point 2

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Examples

Walmart & Kroger using smart pricing on it's products when checking out items

Cloudflare charging you higher rates for the same plan as other users

Some examples of Value Based Pricing include:

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References