ABSTRACT
Product versioning enables software companies to tap into customers’ differential willingness to pay (Lehmann and Buxmann 2009; Shapiro and Varian 1998), while value-based pricing allows them to identify customer value drivers and the perceived worth of different features and functionalities by the customers (Muller 2011; Raghunathan 2000). If we look at the pricing of some of the popular consumer software products available in the market, we can notice that these products are being offered in multiple versions, with substantially differentiated prices. For example, check the prices of Microsoft Office in Figure 26.1, Norton Anti-Virus in Figure 26.2, McAfee Anti-Virus in Figure 26.3, Adobe Acrobat in Figure 26.4 and SPSS in Figure 26.5.
