This PPT slide, part of the 56-slide Strategic Pricing Framework and Tactics PowerPoint presentation, focuses on the economic value of a product, emphasizing that it is determined by the price of the best alternative available to the customer, combined with the value derived from the product's differentiating features. The graph illustrates various factors influencing this economic value, including reference price effects, difficult comparison effects, and impulse buying behavior.

The first point highlights that customers may not fully recognize the value of a product due to a lack of awareness regarding its features. This can lead to a focus on price rather than value, which can skew their purchasing decision. The reference price effect suggests that customers often anchor their perceptions of value based on familiar prices, which may not accurately reflect the product's worth.

Next, the slide addresses the challenge of differentiation. Customers might be unsure about what sets a product apart from its competitors, leading to a reluctance to invest time in understanding these differences. This difficulty can result in missed opportunities for both the customer and the seller, as the unique benefits of the product may not be fully appreciated.

Lastly, the impulse buying behavior is noted, indicating that when the price is perceived as low, customers might make quick decisions without thorough evaluation. This can be advantageous for sellers if they can effectively communicate the product's differentiating features and benefits, thus motivating informed purchasing decisions.

Overall, the insights presented in this slide are crucial for understanding how customers assess value and make purchasing decisions. Recognizing these dynamics can help in crafting strategies that align product offerings with customer perceptions and behaviors.

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Pricing Strategy