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In pricing one new emerging model is Outcome Based Pricing Model. When pricing is done for the IT industry., which of these will represent Outcome Based Pricing?

In pricing one new emerging model is Outcome Based Pricing Model. When pricing is done for the IT industry., which of these will represent Outcome Based Pricing? Correct Answer Increase in profitability for the client

Outcome-based pricing

  • Outcome-based pricing is a method when the price of a product is based according to its perceived value rather than its costs.
  • The business later aligns the price of the product as per the value.
  • This pricing method is suitable where the outcome of the business is linked with the goals of the business and the business outcome thus benefits the end customers.
  • It is important for a business to maintain a balance so that the buyer can define the outcome of the product appropriately which is acceptable and measurable to the service provider.
  • It encourages increased productivity and efficiency of the business.
  • It is a win-win approach for both the service provider and the buyer.

Therefore, when pricing is done for the IT sector, increasing the profitability of the client will represent outcome-based pricing as the main aim of the business is to increase the profit of the client which is linked with the goals of the business.

Related Questions

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