Plaiting pricing into product categories and corporate objectives
Abstract
Purpose
Using the product classification proposed by the Commodity School as it was originally expressed and later developed, this research aims to focus on defining pricing strategies for specific corporate objectives, that is, profit increase, market share increase, and prevention of new competitors from entering the market.
Design/methodology/approach
In order to investigate the relationship between four consumer product categories and alternative pricing strategies in light of various corporate objectives, a set of research questions and propositions was formed and tested on the basis of data reflecting opinions expressed by marketing executives through a mailed survey in Greece.
Findings
For convenience and preference products, the low‐price strategy is used more often, irrespective of corporate objectives, whereas the high‐price strategy is used more often, irrespective of corporate objectives, for specialty products. For shopping products, the low‐price strategy is used more often when the main corporate objectives are increased market share and the prevention of new competitors from entering the market, but when the main corporate objective is increased profits, the high‐price strategy tends to prevail.
Research limitations/implications
The current research could be further expanded to cover other related topics such as the pricing policies and specific pricing methods that are used in the four product categories in combination with the pricing strategies they relate to and serve.
Practical implications
For marketers, the development of the proposed framework can serve as a basis for pricing decisions, provided, of course, that they use research‐based information about the extent to which their products have the attributes of a certain product category.
Originality/value
As the literature review revealed, no conceptual links have been made between the three important parameters examined, that is, product categories, corporate objectives, and pricing strategies, that can form a pricing framework for consumer products. This research serves as a starting point for developing such a three‐point framework.
Keywords
Citation
Kehagias, J., Skourtis, E. and Vassilikopoulou, A. (2009), "Plaiting pricing into product categories and corporate objectives", Journal of Product & Brand Management, Vol. 18 No. 1, pp. 67-76. https://doi.org/10.1108/10610420910933380
Publisher
:Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited