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1 – 10 of over 75000Luis Filipe Lages and David B. Montgomery
The article aims to test how pricing strategy adaptation to the foreign market mediates the relationship between export assistance and annual export performance improvement. It…
Abstract
Purpose
The article aims to test how pricing strategy adaptation to the foreign market mediates the relationship between export assistance and annual export performance improvement. It also aims to consider the effects of management international experience and export market competition.
Design/methodology/approach
Structural equation modelling with WLS estimation is used to test the direct and indirect influences of the variables on short‐term export performance.
Findings
Surprisingly, the findings reveal that the total effects of export assistance on annual export performance improvement are non‐significant, because although export assistance has a direct positive impact on performance, there is a negative indirect impact through export pricing strategy adaptation.
Research limitations/implications
These surprising results suggest that future research is required to incorporate and test the intervening and indirect effects among variables.
Practical implications
The findings also indicate that both export assistance and short‐term export performance improve with management international experience and export market competition.
Originality/value
Since both managers and public policy makers are often short‐term oriented, it is urgent to develop research to better understand determinants of short‐term performance as well as the antecedents of managerial and public policy resource allocation in the short term.
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Xigang Yuan, Zujun Ma and Xiaoqing Zhang
This paper investigates the dynamic pricing strategy of a firm for the successive-generation products under the conditions of the limited trade-in duration and strategic…
Abstract
Purpose
This paper investigates the dynamic pricing strategy of a firm for the successive-generation products under the conditions of the limited trade-in duration and strategic customers. Further, it explores the effect of a limited trade-in duration on the choice of the myopic and strategic customers, besides the optimal dynamic pricing and trade-in strategy of the firm.
Design/methodology/approach
Based on the choice behavior of the myopic and strategic customers, the authors have developed a two-period game-theoretic analytical model to decide the optimal retail prices of the successive-generation products and the optimal trade-in rebate when the firm adopts a dynamic pricing strategy and then investigate three extensions of the basic model to discuss the change in the results owing to the relaxation of certain conditions.
Findings
The authors find from the results that, in terms of profit maximization, it is better to extend the limited trade-in duration, and hence, the firm should implement a dynamic pricing strategy. However, in the situation of using a static pricing strategy, the firm should extend the limited trade-in duration only if the incremental value of the new generation products is below a certain threshold. Moreover, the firm should use a dual rollover strategy instead of a single rollover one. If all customers in the market are myopic, then the firm should also extend the limited trade-in duration.
Research limitations/implications
This study mainly discusses the impact of limited trade-in duration on the firm's dynamic pricing strategy when facing strategic customers, which provides several directions for future research. First, if the government offers subsidies to consumers, how will strategic consumers make purchase decisions? How would the enterprise make its pricing decision? Second, when asymmetric information exists between consumers and firms, how will it affect consumers' choice behavior and firms' pricing decisions? All these issues are worth exploring in the future.
Practical implications
These results offer certain managerial insights for the firm in the decision making on pricing within the trade-in program.
Originality/value
This is the first work to study the dynamic pricing strategy of the firm for the successive-generation products under the conditions of the limited trade-in duration and strategic customers. Further, this work discusses the changes in results owing to the relaxation of certain conditions.
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Matthew B. Myers, S. Tamer Cavusgil and Adamantios Diamantopoulos
The export‐pricing literature is characterized by a distinct lack of sound theoretical and empirical works. Of the marketing decision variables, pricing has received the least…
Abstract
The export‐pricing literature is characterized by a distinct lack of sound theoretical and empirical works. Of the marketing decision variables, pricing has received the least attention in research despite the continued identification of this issue as an important problem area for firms engaged in export marketing. Businesses competing internationally must develop an effective pricing strategy, as this is a critical factor in their operation. Globalization also requires that management coordinate prices across multiple export markets. Research is thus needed on the empirical relationship between an export‐pricing strategy (EPS) and the factors that influence this strategy, as well as the relationship between EPS and the performance of the export venture. A multidimensional conceptualization of export‐pricing strategy is proposed in order to integrate the various components of an EPS and link it with its antecedents. Theoretical insights and empirical findings from the general pricing literature, as well as executive insights from qualitative interviews, are connected with the conventional export‐pricing and strategy literature into an integrated model, and specific research propositions are offered for future cross‐industry empirical studies.
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Paul T.M. Ingenbleek and Ivo A. van der Lans
This article aims to address the relationship between price strategies and price‐setting practices. The first derive from a normative tradition in the pricing literature and the…
Abstract
Purpose
This article aims to address the relationship between price strategies and price‐setting practices. The first derive from a normative tradition in the pricing literature and the latter from a descriptive tradition. Price strategies are visible in the market, whereas price‐setting practices are hidden behind the boundaries of an organization.
Design/methodology/approach
The study deals with the relationship between price strategies and price‐setting practices that refer to the use of customer value, competition, and cost information. Hypotheses are tested on survey data on 95 small and medium‐sized manufacturing and service firms in The Netherlands.
Findings
The results show that price strategies and price‐setting practices are related because strategies are implemented through price‐setting practices. However, some firms do not pursue any of the strategies indicated by pricing theory, some firms engage in practices for no clear strategic reasons, and some firms insufficiently engage in appropriate practices to implement their strategic choices.
Research limitations/implications
The results are limited to small companies. Researchers should examine why firms may not pursue any price strategy that is offered by pricing theory. They may also focus on organizational learning and pricing capabilities.
Practical implications
Managers need greater awareness about the price strategies they can use, should be cautious about a potential mismatch between price strategies and price‐setting practices, and should reassess whether their firms are capable of engaging in the appropriate practices.
Originality/value
Linking price strategies to price‐setting practices reduces conceptual confusion in the pricing literature and may help to specify the gap between pricing theory and practice.
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The purpose of this paper is to provide a framework to help competitive firms find optimal pricing and brand management strategies in order to maximize their respective profits.
Abstract
Purpose
The purpose of this paper is to provide a framework to help competitive firms find optimal pricing and brand management strategies in order to maximize their respective profits.
Design/methodology/approach
A game‐theoretic model is developed to determine optimal pricing and brand management strategies for competitive firms.
Findings
The study demonstrates that optimal pricing and brand management strategies exist for firms in a competitive market. The optimum marketing strategy for competitive firms to employ is the cooperative alliance pricing and brand management strategy, particularly when market competition is very intense.
Research limitations/implications
The present study assumes that all information is known to all parties. However, information could be incomplete. It is recommended that future research explore pricing and brand management strategies under incomplete and asymmetric information settings.
Practical implications
The paper provides a very useful model framework and pricing and brand management strategy for business managers when they are doing business in a competitive market.
Originality/value
The paper fills a conceptual and practical gap for a structured analysis of the current state of knowledge about alliance brand. It provides practical and solid advice and examples demonstrating the application of cooperative alliance pricing and brand management strategies for business managers.
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Advances in technology, operations research, and data driven pricing and marketing are leading pricing strategy into new and untested waters – toward dynamic pricing, and variable…
Abstract
Advances in technology, operations research, and data driven pricing and marketing are leading pricing strategy into new and untested waters – toward dynamic pricing, and variable pricing strategies, which ultimately require changes in how we view pricing strategy. The dominant view of pricing strategy is that pricing goals, objectives, and strategies should be formulated a priori, and should be consistent with marketing and corporate strategies – deliberate pricing strategy. This chapter argues that firms need to develop new strategic pricing skills that lead to more improvisational, innovative, or adaptive pricing strategies. I call this type of price strategy-making emergent pricing strategy. Innovative pricing strategies that the organization judges, or senses to be effective, are repeated, shared, expanded, and refined into successful pricing patterns that, over time and across situations, become pricing strategy. Thus, rather than specifically designing pricing strategy to achieve a goal, here the organization acts upon a price innovation that seems to make sense for this customer, this market segment, this setting, and this situation, then interprets the outcomes, signals, and reactions that seem to flow from the pricing action, and shares and encourages adoption and adaption by others in the organization. Emergent pricing strategy is particularly useful in unstable, turbulent, and complex product and market environments in which price-sensitive buyers wield significant power and influence.
Francesca Sotgiu and Fabio Ancarani
Smart firms are not worried about the impact of the Internet on pricing, but realise that they have the unique opportunity to exploit new options and improve their marketing…
Abstract
Smart firms are not worried about the impact of the Internet on pricing, but realise that they have the unique opportunity to exploit new options and improve their marketing performance. Multi‐channel pricing is one of the most interesting opportunities firms can exploit in the digital economy. Reviews the existing literature on pricing on the Internet and on multi‐channel pricing. Presents the results of an exploratory research on price opportunities perceived by firms. Offers a picture of the possible multi‐channel options available to firms and highlights the importance of the value for and of the customer.
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This study aims to explore optimal pricing strategies for innovations with direct network externalities – the effect that the number of adopters of an innovation has on the…
Abstract
Purpose
This study aims to explore optimal pricing strategies for innovations with direct network externalities – the effect that the number of adopters of an innovation has on the utility of the innovation to other potential adopters. Examples of such innovations are fax machines, e‐mail, cellular phones, and software programs such as word processors. The success of these innovations requires a minimum number of adopters.
Design/methodology/approach
The paper uses agent‐based modeling and simulation.
Findings
The relationship between price and net present value (NPV) of revenue resembles an asymmetric inverse U‐shape. A low‐pricing strategy outperforms high‐pricing, while a moderate‐pricing strategy outperforms both low‐ and high‐pricing strategies. Moreover, heterogeneity of consumer price sensitivity positively affects the NPV of sales.
Practical implications
Pricing durable new products with network externalities is more challenging than other types of innovations. The results indicate that firms can maximize their NPV by adopting a moderate pricing strategy. Moreover, firms must consider heterogeneity of consumer price sensitivity along with the market price elasticity when making pricing decisions. Detailed strategic implications and recommendations are discussed.
Originality/value
Several recent studies have called for examining pricing strategies for new products with network externalities. The study findings challenge the common wisdom that a penetration pricing strategy is an optimal approach for durable products with network externalities. Moreover, while other studies have highlighted the importance of market price elasticity, extensive simulation experiments conducted in this study show that heterogeneity of consumer price sensitivity is an important factor that must be considered. Finally, the study presents an agent‐based modeling approach for exploring optimal pricing of innovations with network externalities.
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Many companies lack insights or fact-based support for the pricing decisions they make in an increasingly complex environment. In order to optimize their pricing process, managers…
Abstract
Purpose
Many companies lack insights or fact-based support for the pricing decisions they make in an increasingly complex environment. In order to optimize their pricing process, managers need to identify key indicators that may influence the performance of their decisions. The purpose of this paper is to report an investigation of pricing determinants in large companies manufacturing capital goods in France. First a conceptual framework is proposed, in order to fill several gaps identified in the literature on pricing practices and more precisely by operating a distinction between environmental variables (determinants), decision making (pricing strategy and price and product-line structures) and its consequence in terms of price level.
Design/methodology/approach
The author conducted an empirical research on the determinants of the pricing process. This study consistedof a questionnaire survey addressed to pricing managers (or executives in charge of pricing) in 98 of the largest manufacturing companies in France about their new-product pricing decision-making process.
Findings
The author studies environmental determinants and their influence on the pricing and describes the structure of pricing determinants as a five dimensions construct: market-based, value-based, position-based, competition-based and production-based. The results show that firms rely on environmental determinants as indicators of their pricing flexibility. These indicators operate as pricing levers: a good position on these variables gives firms more pricing power. But in the vast majority of the cases, companies extensively relied on competitive conditions instead of taking advantage of a favorable position, described as pricing myopia.
Originality/value
This paper describes current pricing practices in leading companies with key informants (mainly pricing managers) highly involved in the pricing decision process, and contrasts two pricing orientations, pricing power vs pricing myopia.
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Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro‐market reforms implemented in the 1980s. Under market‐rationing…
Abstract
Purpose
Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro‐market reforms implemented in the 1980s. Under market‐rationing conditions, people's access to branded drugs does depend on their purchasing power and on the vector of prices they face. The purpose of this paper is to study the regional pricing strategy followed by pharmaceutical firms across Central American countries. These countries differ in such economic factors as per capita income, income distribution, market size, and nature and extent of their social‐security system; thus, there are conditions that foster the implementation of price‐discrimination practices across the region.
Design/methodology/approach
The investigation takes advantage of a large database with information about prices of identical drugs sold across Central American countries and produced by 17 large pharmaceutical companies. Regression analyses are used to study whether price discrimination exists in Central American drug markets and what pricing strategies are followed by different pharmaceutical companies.
Findings
Results show that there are significant differences in the prices of identical drugs across the Central American countries, as well as that pharmaceutical companies follow different pricing strategies.
Originality/value
Cross‐country price comparisons are usually based on constructed price indices, which imply losing detailed information about the products being compared. This investigation uses prices of identical drugs, rather than constructed price indices, to study cross‐country price differences by pharmaceutical companies across the Central American region. The study of price discrimination is crucial to understanding how markets end up rationing such an essential product as pharmaceutical drugs.
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