ABSTRACT
Value-based pricing is often recommended as superior pricing strategy. Value-based pricing strategy is defined by Hinterhuber as "the value a product or service delivers to a predefined segment of customers as the main factor for setting prices." The estimation of customer value plays an important role in the implementation of value-based pricing that firms often experience as difficult. The limited possibility of sales representatives to offer discounts led to a decreased pressure to reduce the prices in customer negotiations. The sales representatives responsible for the original equipment manufacturers used his or her experience and gut feeling when setting prices. As a result, the prices were largely based on customer history. According to the CEO, the competitive positioning of ManComp's products were perceived as essential both in order to signal the value of the product to the customer and to prevent internal predatory pricing, which, in the long run, might lower the average price level.
