Steps For Determining Value Based Pricing

The average lead time of a corporation is 15 weeks from production to consumption. Benchmark firms have a lead time of 8 weeks which is the goal for the supply chain (Heizer & Render 2010). The 8 week number will be achieved by analyzing opportunities to streamline the process thereby creating efficiencies and driving down the amount of time it takes to produce and ship products. Setting a goal for an 8 week lead time will give the firm an opportunity to assess their forecasting and production capabilities presenting a way to identify and address inefficiencies.

I also agree with you in how you stated that the products price and value tie into one another especially when consumers are trying to determine what would essentially be the best option that meets their criteria of value. Likewise, it is important for companies to find significant and unique methods in which to make their product stand out and be the option of choice. Consumers want a product that is highly regarded but that also qualifies with price. They want to know that what they are paying for is of high standards and quality and worthy of the money being spent. Therefore, they look into every possible option to determine if the product meets brand loyalty and has the appeal to be different from their competitors items. You are

The key to successful pricing is to match the product with the consumer's perception of value.

The first stage of the business research process is to discover the problem or dilemma, which in my case was how to

1 One of the most critical steps in the defining process of market research is

When discussing cost of service, average cost would be the cost that Hardee should focus on. Choosing average cost over marginal cost is beneficial because, it contains the cost of both fixed and variable cost; which means that everything that pertains to production is addressed in the overall cost price. Hardee would benefit from using the cost of service method, because they would be able to break even or surpass their original cost of production. However, a disadvantage of cost of service, is that Hardee might lose customers because the customers don’t care about the cost of production. Value of service pricing is a pricing method that is established based on how valuable the service is to consumers in its market. The advantage of Hardee using value based pricing is that the customer will prices that are convenient to them, which could increase the number of their consumers. The disadvantage that Hardee will face from value

The price comes from how much the product should sell for. In considering prices, the organization should consider the "product, customers, competitiveness, and quality."(Purdue, 2007)

The first step was to develop a mission state for our business. This was critical because we needed to define exactly what business we were to be in. Next, we would find sources of information concerning the local economy and market. It was determined that we could use the internet and local business leaders to assist us in gaining the necessary information.

Firms use cost-plus pricing in order to cover their operating costs. Cost-plus means they can increase the price to their customers with whom they have contracts when the operating costs rise. Operating costs can rise for many reasons and cost-plus pricing allows firms the flexibility to manage operating costs. This flexibility is often needed when the price of a service or good is not known or hard to predict in advance (Magloff, 2011).

When trying to determine the correct price, a number of factors must be considered: the market and its segments, the size of each segment, the ability to reach each segment, what distribution channels to target, whether to vary price by segment, the usefulness of promotional offerings, and whether the goal is to skim or penetrate each market.

Each project is customized to the wants and needs of the client. Prices are determined by the scope of the project, materials needed wear and tear on equipment and required profit margin.

Value pricing is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales.” The

Once research is finished, develop a comprehensive business plan that defines the business scope, strategies and financial

They should know whom company customer who needs this products and service who will buy the products

Keeping these realities in mind, it is very much obvious that for this market, we choose and follow a value based pricing and do not keep the price of the product too high. It is advisable rather to follow an average pricing and let the consumers build some enthusiasm around the product.