2. Referring to figure 1, a) Explain the difference between cost-based pricing and value-based pricing strategies - (10 pts). b) Provide an example for each of them - (10 pts). Cost-based pricing Design a Determine Set price based Convince buyers good product product costs on cost of product's value Value-based pricing Assess customer needs and value perceptions Set target price to match customer perceived value Determine costs that can be incurred Design product to deliver desired value at target price Figure 1: Value-based pricing versus Cost-based pricing Strategy Cost-based pricing Value-based pricing Comparison Example