Value-Based Pricing is a pricing strategy where a product's price is set based on the perceived value it provides to customers rather than the cost of production. This approach focuses on understanding how much customers are willing to pay for the benefits they receive, allowing businesses to align their pricing with customer expectations and preferences. By using market research and customer feedback, companies can identify the unique features and advantages of their products. This method can lead to higher profit margins, as customers may be willing to pay more for products they perceive as valuable, enhancing overall business profitability.