Which concept focuses on communicating perceived product value through pricing?

Value pricing is a concept that centers on setting a product's price based primarily on the perceived value to the customer rather than solely on the cost of production or historical prices. This strategy emphasizes the benefits and advantages that a product provides to consumers, which can enhance their willingness to pay a higher price if they believe the product can satisfy their needs and deliver strong value.

By effectively communicating the perceived value of a product, businesses can justify their pricing decisions and potentially broaden their market appeal. This approach contrasts with other pricing strategies, which may focus on different factors such as cost considerations or competitive pricing rather than the customer's view of the product's worth. Ultimately, value pricing helps create a stronger connection between a product's features and benefits and the price at which it is offered, reinforcing the importance of understanding consumer perceptions in effective marketing management.