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Book part
Publication date: 1 November 2008

Andreas Hinterhuber

After pioneering, but insular, work on the conceptualization and measurement of customer value in business markets undertaken in the 80s and 90s, interest in this topic is…

Abstract

After pioneering, but insular, work on the conceptualization and measurement of customer value in business markets undertaken in the 80s and 90s, interest in this topic is substantial since the beginning of this decade. Despite this recent interest, marketing scholars concur that value in business markets is still an under-researched subject. This contribution to the debate is threefold. The paper first proposes an own model of customer value conceptualization in business markets; based on several rounds of testing this theoretically grounded model in managerial practice indications exist to conclude that this model may offer benefits over current models.

Secondly, the paper provides a comprehensive survey of pricing approaches in industrial markets. The paper integrates this literature overview with own empirical findings. Concurrently the paper summarizes extant research on the link between pricing approach and profitability in industrial markets. The paper thirdly proposes a framework for value delivery and value-based pricing strategies in industrial markets. Proposing such a framework is both useful as well as necessary. Useful, since this framework guides new product development and pricing decisions and assists in the implementation of price-repositioning strategies for existing products; necessary, since the theoretical and practical adoption of value-based delivery and pricing strategies may have suffered from the lack of a unifying conceptual framework. Two case studies, one involving the pricing decision for a major product launch at a global chemical company, the other involving value delivery at an industrial equipment manufacturer, illustrate the practical applicability of the proposed framework.

Details

Creating and managing superior customer value
Type: Book
ISBN: 978-1-84855-173-2

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Article
Publication date: 1 May 1980

Michael V. Laric

Suggests that rapid rise of energy costs and worldwide inflation have altered pricing decisions importance. Provides an overview of the marketing literature on pricing  

Abstract

Suggests that rapid rise of energy costs and worldwide inflation have altered pricing decisions importance. Provides an overview of the marketing literature on pricing — intending developing a conceptual framework and classification system for different types of pricing strategies in industrial markets. Strives to provide a more comprehensive basis for developing industrial pricing strategies in addition to earmarking the most relevant marketers' needs. Sectionalises the article and, in the first part, explores existing literature; the second part develops a taxonomy of purchasing situations. Closes by linking the pricing topics, identified previously, to the different purchasing situations. Lists, by topic, the articles used and these are in the Appendix to enable quick reference to potential users. Employs tables for extra emphasis to aid in explanation along with 2 Appendixes.

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European Journal of Marketing, vol. 14 no. 5/6
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 June 2015

Kostis Indounas

The purpose of this paper is to measure the extent to which selected contextual variables have an impact on the adoption of strategic pricing by industrial service firms…

Abstract

Purpose

The purpose of this paper is to measure the extent to which selected contextual variables have an impact on the adoption of strategic pricing by industrial service firms, and determine the effect of the adoption of strategic pricing on company performance.

Design/methodology/approach

Data were collected from 154 industrial service firms operating in four different service sectors through a mail survey. Moreover, qualitative research through 20 in-depth interviews was carried out.

Findings

The study’s main findings indicate that market orientation along with a leading position in the market and market growth boost the development of strategic pricing. On the other hand, technological and market turbulence hinder this development, while the overall impact of turbulence is reduced in market-oriented firms. Finally, a positive impact of strategic pricing on company performance was found.

Research limitations/implications

The adoption of strategic pricing requires attention to a variety of factors, while this adoption can improve both qualitative and quantitative aspects of the company’s performance. The significance of these findings notwithstanding, the context of the study does limit generalization of its findings to other industrial service sectors and national contexts.

Originality/value

The current study represents one of the first attempts to empirically examine the aforementioned topics in an industrial service context.

Details

Journal of Business & Industrial Marketing, vol. 30 no. 5
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 5 August 2014

Kostis Indounas

The purpose of this research paper is to examine the impact of a number of variables on the adoption of strategic pricing by industrial service firms, and the effect of…

Abstract

Purpose

The purpose of this research paper is to examine the impact of a number of variables on the adoption of strategic pricing by industrial service firms, and the effect of this adoption on company performance.

Design/methodology/approach

Data were collected from 301 industrial service firms operating in seven different service sectors through a mail survey. Moreover, qualitative research through 35 in-depth interviews was conducted.

Findings

The findings reveal that market orientation and market growth boost the development of strategic pricing. On the other hand, technological and market turbulence hinder this development, while the overall impact of turbulence is reduced in market-oriented firms. Finally, strategic pricing has a positive impact on company performance in both quantitative and qualitative terms.

Research limitations/implications

The adoption of strategic pricing requires attention to a variety of company- and market-related factors, while this adoption can improve various aspects of company performance. The addition of other moderating and mediating effects could certainly provide additional insights.

Originality/value

The current study represents one of the first attempts to empirically examine the above topics in an industrial service context.

Details

Journal of Services Marketing, vol. 28 no. 5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 31 January 2011

Kostis Indounas and George Avlonitis

The purpose of this paper is to investigate the conditions that led to the adoption of the three new industrial service‐pricing strategies, namely skimming pricing (i.e. a…

Abstract

Purpose

The purpose of this paper is to investigate the conditions that led to the adoption of the three new industrial service‐pricing strategies, namely skimming pricing (i.e. a high initial price), penetration pricing (i.e. a low initial price), and pricing similar to competitive prices.

Design/methodology/approach

In order to achieve the study's research objectives, data were collected through a mail survey from 129 transportation and 48 information technology companies. Moreover, 20 in‐depth personal interviews were conducted in the initial phase of the research.

Findings

Analyzing data from two industrial sectors, the study concludes that skimming pricing and penetration pricing relate to the company's corporate and marketing strategy and the service characteristics, while market conditions influence the adoption of pricing similar to competitive prices.

Research limitations/implications

Given the limited number of the sectors investigated in the current study, the research results may not be easily applicable to other industrial service contexts.

Practical implications

The findings reflect the complexity and multidimensionality of new industrial service pricing. Thus, a single mode for pricing decisions does not seem to exist. Given the uncertainty facing industrial firms when making price decisions, especially with reference to new services, a balanced approach paying attention to both inward‐ and outward‐looking determinants can ensure the effective price determination.

Originality/value

The originality of the paper lies in the fact that it constitutes the first attempt to examine empirically the aforementioned conditions in an industrial service context.

Details

Journal of Business & Industrial Marketing, vol. 26 no. 1
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 30 January 2009

Kostis Indounas

The purpose of this paper is to provide insight into the way industrial service firms price the services they render in the market, with particular emphasis on the pricing

Abstract

Purpose

The purpose of this paper is to provide insight into the way industrial service firms price the services they render in the market, with particular emphasis on the pricing practices of pricing‐competent firms.

Design/methodology/approach

In order to achieve the study's research objectives, data were collected through a mail survey from 129 transportation and 48 information technology companies. Moreover, 20 in‐depth personal interviews were conducted in the initial phase of the research.

Findings

The study found that pricing‐competent firms have developed a “holistic” and multi‐faceted pricing approach, paying attention to both company‐ and market‐related pricing objectives, methods, policies, and information.

Research limitations/implications

These findings underline the multidimensionality that characterizes pricing decisions, necessitating a systematic approach triggered by the thorough examination of both company‐ and market‐related characteristics. The significance of these findings notwithstanding, the narrow context of the study does limit generalization of its findings to other service sectors and national contexts.

Originality/value

The paper constitutes the first attempt to examine empirically the concept of pricing performance in an industrial service context.

Details

Journal of Business & Industrial Marketing, vol. 24 no. 2
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 April 1979

Ronald H. Barback

Examines industrial goods pricing from several angles in a bid to find if pricing and marketing of goods is lagging in relation to more sophisticated practices in the…

Abstract

Examines industrial goods pricing from several angles in a bid to find if pricing and marketing of goods is lagging in relation to more sophisticated practices in the consumer goods market. Finds little justification for the current unsophisticated method used by some price setters.

Details

European Journal of Marketing, vol. 13 no. 4
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 March 1993

Michael Morris and Corine van Erkom Schurink

Assesses the extent to which environmental turbulence is affectingthe pricing behavior of industrial marketers. Introduces a conceptualmodel, based on a review of the…

Abstract

Assesses the extent to which environmental turbulence is affecting the pricing behavior of industrial marketers. Introduces a conceptual model, based on a review of the available literature, in which pricing behavior is the result of changing dynamics in the external environment of firms. Assumes that price itself includes multiple dimensions which combine to form an overall strategy. Describes the results of a survey of a cross‐section of firms in South Africa. Draws a number of implications for theory and practice.

Details

Journal of Business & Industrial Marketing, vol. 8 no. 3
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 August 2008

George Haley and Stephen Goldberg

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

Abstract

Purpose

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).

Design/methodology/approach

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.

Findings

The authors found that though price elasticity appeared limited in the early years, it increased exponentially over the years.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

Details

Management Decision, vol. 46 no. 7
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 13 July 2012

Stephan M. Liozu and Andreas Hinterhuber

This paper seeks to examine the influence of pricing orientation on the price‐setting process in industrial firms.

Abstract

Purpose

This paper seeks to examine the influence of pricing orientation on the price‐setting process in industrial firms.

Design/methodology/approach

The authors designed a qualitative inquiry based on the principles of grounded theory with 44 managers in 15 industrial firms located across ten US states. These managers included CEOs, pricing and marketing professionals, and financial professionals working in three industries (automotive, building products and chemicals).

Findings

The study's results reflect similarities and differences in the experiences of managers in industrial firms using all three pricing orientations. It reveals stark contrasts by pricing orientation with respect to how firms organize for pricing, manage the pricing process, make product pricing decisions, manage the transition to more advanced pricing orientations, and develop internal capabilities to face uncertain and ambiguous decisions. The findings also uncover contrasting price‐setting processes by pricing orientation and the balanced used of scientific versus intuitive decision‐making processes.

Practical implications

Pricing is often a neglected element of the industrial marketing mix. This study offers a variety of organizational practices by pricing orientation. The results highlight how best‐in‐class companies that adopted modern pricing practices to derive product prices are organized and how they reach pricing decisions.

Originality/value

This study studies the commonly accepted pricing orientations and links them to organizational structure and decision‐making theory. This study contributes to bridging pricing and organizational theories.

Details

Journal of Business Strategy, vol. 33 no. 4
Type: Research Article
ISSN: 0275-6668

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