I have been scrolling around in several books in order to understand the topic of pricing strategy. 3 main strategies are mentioned: 1. Competitor-based pricing 2. Cost-based pricing 3. Customer-valued based pricing (price-based costing).
1) What gets me confused: Literature is not clear about the difference between 1+3. For example, if I want to introduce an anti-smoking pill which is not on the market yet (nor by our client nor by competitors), I'll have a look at comparing similar products (anti-smoking patches, electronic cigarette etc.) and compare the value for the customer looking at those products (costs, maturity, scope and length of application etc.). Is this now a competitor-based pricing strategy or a value-based pricing approach? Value-based pricing is defined as: True-economic Value (costs of best alternative + value of performance differential), however, my approach is often categorized under competitive-based pricing if I compare to solution in the books.
2) If I am going for approach 2 (cost-based), do I have to consider the fixed and the variable costs for setting a price or only one of those 2 (sometimes R&D costs are considered, sometimes only the variable costs)
Thanks for your feed-back !!!