Question: Cost-Plus Pricing vs. Value-Based Pricing a. Compare and contrast cost-plus pricing and value-based pricing approaches. Discuss the factors that influence pricing decisions under each method.

Cost-Plus Pricing vs. Value-Based Pricing

a. Compare and contrast cost-plus pricing and value-based pricing approaches. Discuss the factors that influence pricing decisions under each method.

b. ABC Electronics manufactures smartphones and is considering two pricing strategies for its latest model. Under cost-plus pricing, the company adds a markup of 30% to the total cost of production. Under value-based pricing, the company sets the price based on the perceived value to customers. Analyze the advantages and disadvantages of each pricing strategy and recommend the most suitable approach for ABC Electronics.

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