Pricing for value in ICT

Abstract

Despite the apparent benefits of taking a customer value-based pricing approach, most companies are known to set prices based on cost-plus. This paper demonstrates that, even in the information and communication technology (ICT) sector, companies still largely price on a cost-plus basis. The study establishes the prerequisites for value-based pricing and demonstrates that these are largely lacking in ICT companies. This unaccountable failing costs ICT companies dearly: the research indicates that pricing managers believe that customers would pay up to 25 per cent more