What is personalization, or personal value pricing, and how can it be used at the beginning of a product’s life cycle to increase revenues?

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Personalization or personal value pricing is when merchants adjust prices based on their estimate of how much a customer truly values the product. For example, Web merchants may charge committed fans of a musician a higher price for the privilege of receiving a new CD before its official release to retail stores. It is a specific type of dynamic pricing in which merchants match their prices to the personal value that consumers will receive from a purchase by estimating what they believe any given consumer is willing to pay. 

It can be used at the beginning of a product’s life cycle to increase revenues because a certain consumer segment, the so-called early adopters, is willing to pay more for a newly released product.

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