What type of pricing is used primarily to respond to customer perception of value?

The most fitting answer is value-based pricing, as this strategy involves setting prices primarily based on the perceived value of a product or service to the customer rather than on the cost of production or historical prices. This approach requires a deep understanding of customer needs and preferences, allowing businesses to tailor their pricing strategy to align with how much customers believe a product is worth.

In value-based pricing, the price reflects what customers are willing to pay, which may be influenced by various factors such as brand reputation, quality, and customer loyalty. By focusing on perceived value, companies can maximize profitability while ensuring that customers feel they are receiving a good deal.

Psychological pricing, while related to customer perception, generally involves tactics that leverage emotional responses (like ending prices with .99) rather than deeply understanding the actual value perceived by the customer. Cost-plus pricing focuses on marking up a product based on production costs, which does not take customer perception into account. Dynamic pricing adjusts prices based on current market demand and supply, not specifically tied to perception of value.