Demand-based pricing:
The first two approaches of pricing are based on the company and its competitors rather than on customers. Neither approach takes into consideration that customers may lack reference price, may be sensitive to non-monetary prices and may judge quality on the basis of price. All of these factors can and should be accounted for in a company’s pricing decisions. The third major approach to pricing, demand-based pricing, involves setting prices consistent with customer perceptions of value: prices are based on what customers will pay for the services provided.
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