The relationship between customer value and pricing strategies: an empirical test

Anna Codini (University of Brescia, Brescia, Italy)
Nicola Saccani (Department of Industrial and Mechanical Engineering, Supply Chain and Service Management Research Centre, University of Brescia, Brescia, Italy)
Alessandro Sicco (Department of Industrial and Mechanical Engineering, Supply Chain and Service Management Research Centre, University of Brescia, Brescia, Italy)

Journal of Product & Brand Management

ISSN: 1061-0421

Publication date: 26 October 2012

Abstract

Purpose

The paper seeks to fill a research gap that concerns empirical studies on value‐based pricing in durable consumer goods. It aims to analyse the relationship between value for the customer and market prices in the washing machines market.

Design/methodology/approach

The customer value of a sample of 129 washing machine models is assessed through the conjoint analysis technique. It is then compared through a regression analysis to the market prices of the products.

Findings

The regression analysis reveals that the alignment between price and value for the customer is limited (only one of the two subsamples presents a positive dependence among the variables).

Research limitations/implications

The study lacks explanatory power about the reasons for the misalignment between price and customer value in the investigated sector. The results, moreover, refer to a specific product category and a specific national market, although their representativeness as a mature durable in a mature market suggests a broader relevance of the implications. The size of the samples of the empirical research is also limited.

Practical implications

The paper provides an example and guidelines to practitioners on how to implement a customer value assessment. It provides practitioners a deeper understanding of the consequences of misaligned pricing, and of the potential of understanding the actual value sources for the customers.

Originality/value

The study empirically assesses the relationship between value for the customer and market prices of a category of mature durable goods. The results support the claim that value‐based pricing, although believed to be superior to other pricing policies, is still not established as a prominent practice. Moreover, the findings contribute to the discussion on the value of environment‐related attributes and their lifecycle monetary impact on the customers. It also identifies another possible obstacle to the adoption of value‐based pricing, i.e. the structure of the market, to be added to the ones reviewed in the literature.

Keywords

Citation

Codini, A., Saccani, N. and Sicco, A. (2012), "The relationship between customer value and pricing strategies: an empirical test", Journal of Product & Brand Management, Vol. 21 No. 7, pp. 538-546. https://doi.org/10.1108/10610421211276321

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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