value-based pricing
n. The practice of charging different prices to different consumers for the same product, based on what that product is worth to each consumer.

Example Citation:
What exactly is yield management? Essentially, it's value-based pricing. A product's worth generally varies among different groups of people—business travelers versus vacation travelers, avid baseball fans versus those just looking for something to do on a Tuesday night. By characterizing a group whose members value a product similarly, but differently from other groups, a company can generally establish pricing mechanisms tailored to each customer group's values.
—Warren H. Lieberman, "A Revolution is Brewing In Pricing," Los Angeles Times, June 6, 1990

Earliest Citation:
What is the rationale for our pricing strategy? The pricing of services is a nebulous area. Cost-based pricing is often difficult to determine, and there are few formulas for effective value-based pricing.
—Dan Thomas, "Strategy Is Different in Service Businesses," The Harvard Business Review, July 1978

Related Words: