Difference between value based and cost based pricing:

Cost-based pricing takes the cost of producing any product or service and adds an amount that we need to make a profit. This is usually expressed as a percentage of cost. It is generally more suited to businesses that deal with large volumes or which operates in markets dominated by competition on price but cost-based pricing ignores our image and market positioning.e.g, Wal-Mart and Dell.
Value-based pricing focuses on the price we believe customers are willing to pay, based on the benefits our business offers us. Value-based pricing depends on the strength of the benefits we can prove our offer to customers. This approach can prove very profitable, it can alienate potential customers who are driven only by price and can also draw in new competitors.