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Economic Value Calculation

In this article, we contrast two fundamentally different approaches to using “value” to set price and determine pricing strategy.  In the first, customer value mapping (CVM), value is the perceived quality customers receive per unit of price. In other words, value is determined in part by price. In the second, economic value modeling (EVM), value is the economic savings and gains customers realize by buying the firm’s product instead of products from other competitive suppliers.

 

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