Important factors in the sale and pricing of services

Abstract

The first of a two‐article series addressing important factors in the pricing of services. Success at garnering a high price and margin on a service hinges on important variables. Mistakes in the delivery and pricing of services can have far‐reaching “residual damage” effects quite different from those associated with the delivery of a “tangible” product. Examines a host of issues important in the pricing and sale of services including the differences in the product versus service purchase decision. Discusses factors influencing the acceptable price and purchase decision; customer need fulfilment and satisfaction; elements of risk as well as the importance of the risk for services versus products. Argues that prompting a sale of service at any price depends on a heavy weighing of certain variables of great import to the customer. Provides background information important in the pricing of services. Focuses on how one might maximize perceived favourable attributes of services to influence price favourably. Examines the importance of “residual damages” resulting from errors in delivery of services.

Citation

Groth, J. (1995), "Important factors in the sale and pricing of services", Management Decision, Vol. 33 No. 7, pp. 29-34. https://doi.org/10.1108/00251749510090557