Price is the monetary expression of the value of a good or service as perceived by the seller, while value is the subjective assessment of the utility and importance that the buyer assigns to that good or service. Often, the price does not align with the value perceived by the consumer.

This disparity between price and value creates significant challenges for institutions and companies in pricing their products in a way that aligns with buyers' expectations and perceptions of value. Understanding this contradiction and how to manage it has become essential for achieving success in today's competitive markets.

Definition of Price

Price is the monetary value required in exchange for a good or service. It reflects the value that the seller places on what they offer in terms of goods or services. Price is usually determined through market mechanisms and negotiation between seller and buyer, taking into account factors such as production costs, competition, demand, and others.

Definition of Value

Value is the subjective assessment of the utility or importance that a buyer assigns to a particular good or service. It represents the amount that the buyer is willing to pay in exchange for obtaining the good or service. Value varies from person to person according to their perceptions and personal preferences.

The Difference Between Price and Value

The fundamental difference between price and value lies in the fact that price is what we actually pay, while value is what we get or what we believe we get. This contradiction can lead to different situations in the market.

Aspect	Price	Value
Determination Methods	Determined by market mechanisms, supply and demand	Varies from person to person according to their preferences
Nature	Fixed monetary value	Subjective and meaningful assessment
Relationship Between Them	May be higher or lower than perceived value	May be higher or lower than price
Influencing Factors	Market mechanisms, production costs, competition	Personal perception, marketing quality, meaningful importance
Result of Contradiction	May lead to not purchasing the good or service	May lead to paying a higher or lower price than perceived value

Examples of Contradiction Between Price and Value

Artworks and Unique Items

• Price: May be extremely high due to the rarity of the artwork and the artist's fame
• Value: May be higher than the price for buyers who appreciate the creative and historical aspects of the work

Jewelry and Diamonds

• Price: Very high due to rarity and the efforts involved in extraction and manufacturing
• Value: May be lower than the price for some consumers who don't see significant meaningful value in owning them

Modern Technology

• Price: High when launching a new product, then gradually decreases with technological advancement
• Value: May be higher than the price for consumers who appreciate the advanced features and functions of these technologies

Specialized Services (Medical, Legal, Consulting)

• Price: High due to the expertise and specialized skills of the provider
• Value: May be higher than the price for beneficiaries who appreciate the importance of these services to them

Goods with Emotional or Social Value

• Price: May be high due to demand or social obsession
• Value: May be higher than the price for buyers who see greater meaningful value in owning them

These examples illustrate how contradiction may arise between price and perceived value in various goods and services.

Ways to Improve Pricing Strategies and Reduce Contradiction

There are several ways companies can follow to improve pricing strategies and reduce the contradiction between price and value perceived by consumers:

Understanding Product Value from Customers' Perspective

• Conducting in-depth market research to understand the value factors important to customers and what they prioritize
• Listening to customer feedback and utilizing it to determine ways to enhance perceived value

Designing High-Value Products and Services

• Focusing on improving the quality of products and services and adding valuable features for customers
• Conducting tests and experiments to determine characteristics that increase customers' perception of value

Using Flexible and Dynamic Pricing Strategies

• Developing innovative pricing models that respond to changes in customers' perception of value
• Considering flexible pricing options such as value-based pricing or differential pricing

Enhancing Brand Value

• Building a strong and distinctive brand image that enhances customers' perception of value
• Investing in marketing and promotion to introduce customers to the value of products and services

Enhancing Communication and Transparency with Customers

• Providing clear and accurate information about price composition and value elements offered
• Involving customers in the pricing process and allowing them to influence it

By following these strategies, companies can reduce the contradiction between price and perceived value, and achieve pricing that aligns with customer expectations and enhances their loyalty in the long term.