This paper aims to determine the effects of a strategy of annual price increases for mature industrial, razors/blades products. Little prior research has looked at pricing strategy for mature industrial products and no prior research has looked at mature industrial products of capital goods (razors) and linked supplies (blades).
The authors surveyed a major industrial manufacturer's 3,000‐strong customer base to determine the price elasticity effects of annual price increases over a four‐year time span.
The authors found that though price elasticity appeared limited in the early years, it increased exponentially over the years.
The authors used a single company's 3,000 strong customer base for in‐depth analysis of concepts, with attendant limitations. Specifically, the population of respondents, though large, represents the customer base of a single company. The findings of this exploratory study must be replicated with more diverse populations before they can be generalized.
The study's practical implications lie in its contribution to understanding pricing strategy in mature industrial markets. Researchers and managers frequently treat these markets as extensions of their emerging or growing product life cycle stages. However, mature product markets exhibit different product‐market characteristics.
The article's originality and value stems from its addressing an increasingly important issue. The lack of research covering mature industrial products' pricing strategy, coupled with the increasing number of products that fall within this life cycle, make the product category increasingly central to many companies' profitability.
Haley, G. and Goldberg, S. (2008), "Reciprocally derived demand and pricing strategy for mature industrial products", Management Decision, Vol. 46 No. 7, pp. 1066-1080. https://doi.org/10.1108/00251740810890221
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