Development of Value-Based Pricing Model for Software Services
In an effort to improve profits, most contemporarybusinesses are implementing operational cost basedengineering initiatives and measures for pricingservices. However, service provision requires businessexecutives to have a comprehensive understanding ofthe meaning of ‘value’ as a guide to strategically priceservices in order to improve profitability. This papermakes an effort to present a theory of value – as acustomer prerogative of service utilisation. Theresearch aims at developing a pricing model to utilise,communicate and capture the value of a serviceprovided by a service provider. It takes a newapproach of focusing on the external value asperceived by the customer and advocate matchingprice to value. The paper helps both; the customersand the service providers to achieve business growthby commanding the right price for the softwareservices. The ultimate goal is to match the price thecustomer pays for a service expected to deliveroutstanding value.