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Article
Publication date: 16 April 2020

Kostis Indounas

The purpose of this paper is to investigate the characteristics that lead to the adoption of the three new business-to-business (B2B) product pricing strategies, namely…

Abstract

Purpose

The purpose of this paper is to investigate the characteristics that lead to the adoption of the three new business-to-business (B2B) product 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

To achieve the study’s research objectives, data were collected through a mail survey from 116 B2B firms, operating in four different sectors.

Findings

The adoption of skimming pricing and penetration pricing is triggered by company-related factors that are associated with the company’s corporate and marketing strategy and the product characteristics, while the adoption of pricing similar to competitive prices is influenced by market-related factors that are associated with customers’ and competitors’ characteristics.

Practical implications

The above findings indicate that the managers responsible for setting prices for new B2B products should follow a “situation-specific approach” and be guided by the unique characteristics of their internal and external environment.

Originality/value

Its contribution lies on the fact that, building upon quests within the existing literature, it constitutes one of the first attempts to examine empirically the aforementioned issue.

Details

Journal of Business & Industrial Marketing, vol. 35 no. 11
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 7 June 2019

Kostis Indounas

The purpose of this paper is to investigate the pricing objectives that business-to-business (B2B) service companies pursue to set their prices and to examine the impact…

Abstract

Purpose

The purpose of this paper is to investigate the pricing objectives that business-to-business (B2B) service companies pursue to set their prices and to examine the impact of market structure on these objectives.

Design/methodology/approach

To achieve the research objectives, data were collected from 193 companies operating in four different B2B service industries.

Findings

The findings of the study indicate that, in the current study, the companies investigated seem to follow various pricing objectives with a particular emphasis being placed on customer-related ones. The study also reveals that the market structure does have an impact on the pricing objectives pursued because different market conditions are found to lead to different pricing objectives.

Practical implications

The above findings indicate that the managers responsible for setting prices within their firms should follow a “situation-specific approach” and be guided by the unique characteristics of their markets.

Originality/value

Given the lack of similar studies in the existing B2B services literature, the value of the paper is that it represents one of the first attempts to empirically examine this issue.

Details

Journal of Business & Industrial Marketing, vol. 34 no. 5
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 15 November 2018

Kostis Indounas

The purpose of this paper is to investigate the pricing objectives (e.g. customer-related objectives, sales-related objectives, profit-related objectives) that service…

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1073

Abstract

Purpose

The purpose of this paper is to investigate the pricing objectives (e.g. customer-related objectives, sales-related objectives, profit-related objectives) that service companies pursue to set their prices and to examine the impact of market structure on these objectives.

Design/methodology/approach

To achieve the research objectives, data were collected from 184 companies operating in four different service industries, namely, logistics companies, financial services providers, information technology companies and airlines.

Findings

The findings indicate that the companies that were investigated in the current study seem to follow a hierarchy of pricing objectives, in which their main focus is on the maintenance of the existing customers and the attraction of new ones to ensure their long-term survival in their market without, however, disregarding financial issues and objectives. The study also revealed that the market structure, along with the sector of operation, has an impact on the pricing objectives pursued, as different market conditions were found to lead to different pricing objectives.

Practical implications

The above findings indicate that managers responsible for setting prices within their firms should be guided by the unique characteristics of their markets.

Originality/value

Given the lack of similar studies within the existing services sector literature, the originality/value of the paper lies in the fact that it presents one of the first attempts to empirically examine this issue from a marketing point of view.

Details

Journal of Services Marketing, vol. 32 no. 7
Type: Research Article
ISSN: 0887-6045

Keywords

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Article
Publication date: 16 November 2015

Kostis Indounas and Aggeliki Arvaniti

The purpose of this study is to provide insights into the success factors of new-to-the-firm health services.

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1028

Abstract

Purpose

The purpose of this study is to provide insights into the success factors of new-to-the-firm health services.

Design/methodology/approach

The study was based on the case study methodology with three leading health organizations.

Findings

The study’s findings indicate that the success factors of new health services are largely in line with the literature on new service development. Our study also revealed the significance of two factors that have not been identified by previous studies, namely, branding and doctors’ participation in the new service development process.

Research limitations/implications

Introducing a successful new health service into the market seems to require an emphasis on a variety of factors related to the company’s internal and external environment, while two important characteristics are the role of branding and doctors. Despite its acceptance as a scientific method, the case study approach that was selected limits the ability to generalize the results to the broader health industry.

Originality/value

The current study represents one of the first attempts to examine the above topic in a health-related service context.

Details

Journal of Product & Brand Management, vol. 24 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

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Article
Publication date: 19 June 2009

Kostis Indounas and George J. Avlonitis

The purpose of this paper is to provide insights into how service firms price the services that they render in the market. In particular, the association between the…

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3201

Abstract

Purpose

The purpose of this paper is to provide insights into how service firms price the services that they render in the market. In particular, the association between the pricing objectives that they pursue and the organizational and environmental characteristics that influence pricing decisions are investigated.

Design/methodology/approach

Data are collected from 170 companies operating in six different service sectors in Greece through personal interviews. Moreover, qualitative research through 26 in‐depth interviews is also conducted.

Findings

Following the classification scheme put forward by Avlonitis and Indounas, it can be concluded that a combination of different organizational and environmental characteristics leads to each one of the eight pricing objectives examined in the study.

Research limitations/implications

The above findings indicate the need to treat pricing decisions using a contingency approach. Formulating a specific pricing objective requires an examination of certain organizational and environmental concerns. The significance of these findings notwithstanding, the context of the study (Greece) is the most important caveat, since it limits the ability to generalize the results to other countries.

Originality/value

This paper represents the first attempt to empirically examine the potential association between the aforementioned pricing objectives and characteristics.

Details

Journal of Service Management, vol. 20 no. 3
Type: Research Article
ISSN: 1757-5818

Keywords

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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…

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1289

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

Keywords

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Article
Publication date: 14 March 2008

Kostis Indounas

The purpose of this paper is to investigate the relationship between pricing and ethics in two industrial service contexts. In particular the pricing practices that lead…

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3431

Abstract

Purpose

The purpose of this paper is to investigate the relationship between pricing and ethics in two industrial service contexts. In particular the pricing practices that lead to non‐ethical pricing behavior along with the factors that could reduce such a behavior are examined. Moreover, the extent is addressed to which companies that do perceive that pricing decisions entail ethical considerations are differentiated from those companies that do not hold such a perception in terms of the pricing objectives that they pursue in order to set their prices.

Design/methodology/approach

In order to achieve the study's research objectives, data were collected from 177 companies, operating in the transportation and information technology industries through a mail survey. Moreover, 20 in‐depth personal interviews were conducted in the initial phase of the research.

Findings

The main pricing practices that were perceived as being non‐ethical by respondents are related to determination of prices that lead to excessive profits, take advantage of a customer's needs and are below cost. Regarding the factors that could reduce such a behavior, the study concluded that a corporate culture that facilitates a customer orientation towards pricing decisions, the market's own mechanisms and the agreements between companies are more effective than governmental intervention. Furthermore, companies that do perceive that pricing decisions are related to ethical considerations tend to follow a more balanced approach when setting prices by pursuing both customer‐ and competition‐oriented pricing objectives, without, however, overlooking financial objectives.

Research limitations/implications

The practical implications of the findings refer to the fact that managers might have a lot to gain by avoiding pricing practices that raise ethical considerations and endeavoring to understand the potential ethical implications of these practices. The significance of these findings notwithstanding, the context of the study is the most important caveat since it limits the ability to generalize the results in other sectors and countries.

Originality/value

The contribution of the paper lies in the fact that it presents the first attempt to empirically examine the relationship between pricing and ethics in an industrial service context.

Details

Journal of Business & Industrial Marketing, vol. 23 no. 3
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 1 April 2006

George Avlonitis and Kostis Indounas

The purpose of the present study is to explore the pricing methods that service companies adopt in order to set their prices, along with the service, organizational and…

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2344

Abstract

Purpose

The purpose of the present study is to explore the pricing methods that service companies adopt in order to set their prices, along with the service, organizational and environmental characteristics that influence these methods.

Design/methodology/approach

To achieve the research objectives, data were collected through personal interviews in 170 companies operating in six different services sectors in Greece.

Findings

The study concluded that the two most popular pricing methods are the traditional “cost‐plus” method and “pricing according to the market's average prices”, while all the other methods (including customer‐based methods) are adopted by a small number of companies in the sample. Similarly, “service cost” along with “competitors' prices” were found to be the two most important characteristics that are taken into consideration when setting prices.

Research limitations/implications

Despite the importance attached to cost and competitive issues when setting prices, pricing decisions need to be treated from a more “holistic” approach, where apart from cost and competition, emphasis will also be placed on other company and environmentally related characteristics, including customers. The significance of these findings notwithstanding, the context of the study is a caveat, since it limits the ability to generalize the results to other countries.

Originality/value

The contribution of the paper lies in the fact that it presents the first attempt to examine empirically the potential impact of these characteristics on the pricing methods used.

Details

Journal of Product & Brand Management, vol. 15 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 3 April 2018

Reinaldo Guerreiro and Juliana Ventura Amaral

While the gap between economic theory and companies’ practice, regarding to the pricing setting, has been extensively explored and explained, the new gap between the…

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2299

Abstract

Purpose

While the gap between economic theory and companies’ practice, regarding to the pricing setting, has been extensively explored and explained, the new gap between the marketing normative view and companies’ practice needs further clarification. In this way, the paper aims to investigate whether marketing researchers’ claim that the use of cost-based price approach prevails over the use of value-based price approach is pertinent.

Design/methodology/approach

The paper is guided by the following research question: “Does price-setting based on cost plus margin go against the value-based price approach?” The answer to this question is grounded in reflections on results of previous research studies and in a case study conducted in an industrial company. Because of the qualitative focus of the present study, hypotheses are not established, but rather the following proposition: certain companies use the mechanics of cost plus margin in the sale price-setting process, but it does not necessarily mean that these companies set prices based on cost.

Findings

The arguments, propositions and the case study findings provide the logical sequence and the support required to conclude that price-setting based on cost plus margin does not always conflict with the value-based price approach. As a result, it may be claimed that the general proposition established is theoretically valid, i.e. using a price formula that contains the elements cost and margin does not necessarily mean that the company sets prices based on cost.

Originality/value

The key contribution of this paper is demonstrating that in certain business environments, such as, B2B, using the price formation mechanics based on cost plus margin is the way found by companies to enable the approach adopted. The approach may be cost-based or value-based price. This is the first study that explicitly reveals how B2B companies may set prices based on value while simultaneously preserving the simplicity of cost plus margin formulas. Researchers have significant misconceptions about these formulas: in previous studies, they classified all price-making companies as those adopting the cost-based price approach simply because they used formulas containing the element cost.

Details

Journal of Business & Industrial Marketing, vol. 33 no. 3
Type: Research Article
ISSN: 0885-8624

Keywords

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