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Article
Publication date: 11 March 2014

Stephan Liozu, Andreas Hinterhuber and Toni Somers

– The purpose of this paper is to test the relationship between organizational antecedents, pricing capabilities, and firm performance.

Abstract

Purpose

The purpose of this paper is to test the relationship between organizational antecedents, pricing capabilities, and firm performance.

Design/methodology/approach

Quantitative survey of 748 managers from mostly large companies globally.

Findings

It was found that the following five key organizational resources (the 5 Cs) – center-led price management, organizational confidence, championing behaviors, organizational change capacity, and pricing capabilities – positively influence firm performance. Furthermore, it was found that center-led price management, organizational change capacity, and championing behaviors act as important antecedents to pricing capabilities and, except for the former, to organizational confidence. The authors also examine interaction and mediation effects.

Originality/value

The results thus suggest that generic organizational factors – namely center-led price management – as well as highly idiosyncratic firm, specific capabilities – namely organizational confidence, championing behaviors by top management, organizational change capacity, and pricing capabilities – are key requirements to increase firm performance via pricing.

Details

Management Decision, vol. 52 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 22 March 2013

Stephan M. Liozu and Andreas Hinterhuber

How do pricing methods affect firm performance? From both an academic as well as a managerial perspective this question is important. The literature is silent on the…

Abstract

Purpose

How do pricing methods affect firm performance? From both an academic as well as a managerial perspective this question is important. The literature is silent on the relationship between pricing approach and company performance. The aim of this paper is to address this research gap.

Design/methodology/approach

To address this practical and theoretical deficit, the authors surveyed 1,812 professionals involved in pricing to measure the influence of pricing approach on firm performance.

Findings

The authors find a positive relationship between value‐based pricing (but not competition‐based pricing) and firm performance. Furthermore, the authors find that the three pricing orientations differently influence firm pricing capabilities, which in turn are positively related to firm performance. This paper is thus the first paper documenting a positive relationship between value‐based pricing and firm performance through a quantitative research design.

Originality/value

These findings have important theoretical as well as practical implications and suggest that all firms, regardless of size, industry or geography, benefit from value‐based pricing.

Details

Management Decision, vol. 51 no. 3
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 31 January 2015

Katharina Maria Hofer, Lisa Maria Niehoff and Gerhard A. Wuehrer

In this study, we examine the influence of different components of dynamic capabilities on value-based pricing and export performance. We develop a research model…

Abstract

In this study, we examine the influence of different components of dynamic capabilities on value-based pricing and export performance. We develop a research model investigating the three component factors of dynamic capabilities, that is, adaptive capability, absorptive capability, and innovative capability, and their respective influence on value-based pricing and export performance. Furthermore, we hypothesize a relationship between value-based pricing and export performance. Building upon a sample of 172 Austrian CEOs and marketing managers, we test our hypotheses through structural equation modeling using partial least squares. The results reveal that a firm’s adaptive capability and innovative capability both positively influence value-based pricing. Furthermore, our results show that adaptive capability has a positive influence on export performance. The relationship between value-based pricing and export performance could not be supported. Hence, we conclude that a firm’s adaptive capability plays a central role in international pricing and leads to enhanced export performance.

Details

Entrepreneurship in International Marketing
Type: Book
ISBN: 978-1-78441-448-1

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Article
Publication date: 11 March 2014

Stephan Liozu and Andreas Hinterhuber

The literature has paid increased attention to pricing capabilities as a set of distinctive, complex activities, routines, and processes that drive company performance…

Abstract

Purpose

The literature has paid increased attention to pricing capabilities as a set of distinctive, complex activities, routines, and processes that drive company performance. Despite this emphasis, little research has addressed the pricing-capabilities construct itself, and no accepted measure of pricing capabilities exists. The purpose of this paper, therefore, is to document the design, development, and validation of a dedicated pricing-capabilities scale, PRICECAP.

Design/methodology/approach

Qualitative plus three quantitative surveys.

Findings

The present research describes the development of a ten-item measure, PRICECAP, that can be used to assess organizational capabilities related to pricing.

Research limitations/implications

The reliability and validity of the scales were assessed through three separate quantitative studies using exploratory and confirmatory analysis. The PRICECAP scale has a variety of potential applications and can serve as a framework for future empirical research in marketing theory as well as an instrument to assess, compare, and develop pricing capabilities in marketing practice.

Originality/value

Empirical research has provided scales to measure value creation but a scale to measure value capture – i.e. pricing – capabilites is lacking. This study covers this gap and provides a new, parsimonious, ten-item construct to measure pricing capabilities.

Details

Management Decision, vol. 52 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 18 June 2018

Aluisius Hery Pratono

The purpose of this study is to develop a structural equation model to explain the complex relationship between social network and firm performance by introducing the…

Abstract

Purpose

The purpose of this study is to develop a structural equation model to explain the complex relationship between social network and firm performance by introducing the mediating role of trust, selling capability and pricing capability.

Design/methodology/approach

The research model with hypothesis development was derived based on the literature. To provide empirical evidence, this study carried out a survey in which the data were equated with a list of questionnaires with a random survey of 380 small and medium enterprises (SMEs) in the Indonesian context.

Findings

This study indicates that the use of social media in management process will not affect the increasing firm performance, unless the firms build trust upon social networks. The social network with trust allows the firms to gain a pricing capability and a selling capability, which brings a positive impact on firm performance. The results also show that the selling and the pricing capabilities become essential following the utilizing the social media, which concerns on trust building.

Research limitations/implications

This study focused on the small-to-medium context, which has conventionally provided an exemplary site for the development of social capital theory but raises issues of generalizability across different contexts.

Practical implications

To the managers, it is advisable to encourage their employees to consciously exploit the selling capability by enhancing the business networks via social media to achieve the firm performance.

Originality/value

This paper contributes to the social capital theory by explaining the mediating role of trust in the complex relationship between social network and firm performance. This study provides evidence that trust plays a pivotal role in social networks, which enable the observed firms to achieve the performance.

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Article
Publication date: 12 July 2013

Stephan M. Liozu and Andreas Hinterhuber

The purpose of this paper is to identify a set of specific activities and a set of competencies associated with above‐average firm performance.

Abstract

Purpose

The purpose of this paper is to identify a set of specific activities and a set of competencies associated with above‐average firm performance.

Design/methodology/approach

Quantitative survey of 748 respondents.

Findings

It was found that four key competencies differentiate high performing from low performing companies: organizational confidence; pricing capabilities; organizational change capacity; and championing behaviors by top management. The research also identifies a set of specific activities that are linked with superior firm performance: activities directed at the improvement of pricing effectiveness (e.g. trainings, pricing tools; pricing performance reviews); improvements in product differentiation and product quality (e.g. through innovation and research aimed at identifying and creating customer value); increased sense of organizational confidence (e.g. optimism, resilience, “can do”‐attitude); improved support of top management; improved ability to stick to list prices and minimization of discounting behaviors; and finally, enhanced cultural adaptability to respond to changing market conditions.

Research limitations/implications

Through a quantitative research design, the authors document the link between pricing capabilities, organizational confidence and superior firm performance.

Practical implications

The authors identify both specific activities, as well as higher order competencies, practising managers need to develop in order to increase firm performance via pricing. Taking a hypothetical company as example, the authors' data show that, on average, a one point improvement on a seven‐point scale in organizational confidence leads to a 4 per cent improvement in return on sales.

Originality/value

Our research highlights which organizational competencies drive firm performance. Specifically this research is the first quantitative survey which documents a positive relationships between organizational confidence and firm performance.

Details

Journal of Business Strategy, vol. 34 no. 4
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 31 March 2020

Rozenn Perrigot, Begoña López-Fernández, Guy Basset and Olivier Herrbach

As franchisees are independent entrepreneurs, one important part of the business format that franchisors are not allowed to impose on their franchisees is resale prices

Abstract

Purpose

As franchisees are independent entrepreneurs, one important part of the business format that franchisors are not allowed to impose on their franchisees is resale prices. They are only allowed to indicate a recommended or a maximum price. This study aims to look further into the capabilities underlying the calculation of resale prices and suggests that price-setting is part of both the “business know-how” transferred to franchisees and the “organizational know-how,” that is, capabilities developed and kept at the franchisor level.

Design/methodology/approach

This study adopted a qualitative methodology with a total of 65 interviews, 19 with franchisors and 46 with franchisees, all operating in the French market.

Findings

The findings show that resale pricing is a process that involves know-how. The complexity of pricing leads to develop specialized and broad capabilities. The first type of know-how, i.e., business know-how transferred to franchisees, deals with operational implementation of recommended resale prices in the stores. The second type, i.e., organizational know-how, not transferred as a safeguard against opportunism, connects across other functions of the franchise chain such as R&D and communication.

Originality/value

This study confirms the existence and relevance of another kind of know-how apart from the business know-how that is transferred to the franchisees. Organizational know-how at the chain level, though often neglected, is a necessary determinant of sustaining a competitive advantage. This know-how is not transferred to the franchisees but contributes to the success and sustainability of the franchisor/franchisee relationship. Franchisors should thus work on improving their capabilities to better support their franchisees. Moreover, this study highlight the complexity and extreme importance of setting the right resale price.

Details

Journal of Business & Industrial Marketing, vol. 35 no. 4
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 19 November 2018

Lars Hendrik Achterberg, Maktoba Omar, Ambisisis Ambituuni and Oliver Roll

The purpose of this paper is to analyse the external antecedents of pricing information acquisition in an integrative manner. The study develops understanding of…

Abstract

Purpose

The purpose of this paper is to analyse the external antecedents of pricing information acquisition in an integrative manner. The study develops understanding of determinants of information acquisition as a crucial prerequisite of successful pricing strategies within German small and medium enterprises (SMEs).

Design/methodology/approach

A large scale survey of sampled 2,542 SMEs was conducted. A total of 220 questionnaires were completed, reflecting a response rate of 9 per cent. This was acceptable considering the sensitivity of pricing issues. A final sample of 173 usable questionnaires were obtained.

Findings

The result indicates that external antecedents of pricing information acquisition practices have a positive impact on SME pricing performance, and pricing performance is positively related to firm performance.

Practical implications

The study indicates that external antecedents of pricing information acquisition are strategic pricing capabilities, which should receive attention by SME managers.

Originality/value

This study bridges significant obstacle to knowledge generation and theory development of the important issues of pricing information acquisition in SMEs.

Details

Journal of Small Business and Enterprise Development, vol. 25 no. 6
Type: Research Article
ISSN: 1462-6004

Keywords

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Article
Publication date: 20 December 2019

Penpattra Tarsakoo and Peerayuth Charoensukmongkol

This paper aims to explore the contribution of social media marketing capability on business performance of firms in Thailand. The conceptualization of social media…

Abstract

Purpose

This paper aims to explore the contribution of social media marketing capability on business performance of firms in Thailand. The conceptualization of social media marketing capability was developed using five aspects of the spanning capabilities of Day’s strategic framework.

Design/methodology/approach

Questionnaire data were collected from business entrepreneurs in Thailand who attended seminar and training courses (N = 364). Partial least squares structural equation modeling was used to analyze data.

Findings

Among five aspects of social media marketing capability, social media product development capabilities and social media marketing implementation capability were positively and significantly related to customer relationship performance and financial performance; social media marketing communication capability had a significantly positive relationship only with customer relationship performance, whereas social media planning capability was found to have a significantly positive relationship only with financial performance. However, the analysis did not find the significant relationship between social media pricing capability and the two aspects of firm performance.

Research limitations/implications

First, the results were obtained using cross-sectional data collection. Second, the data were collected using convenience sampling. Third, the performance variables used in the analysis are perceptual measures. Finally, the study was only conducted in Thailand context and did not lend itself to any general applicability.

Practical implications

This research suggests that it is important for Thai companies that rely on social media to develop marketing capabilities and learn how to incorporate social media into their marketing activities.

Originality/value

This study built a conceptual foundation of social media marketing capabilities based on Days strategic framework which provided a complete and comprehensive view about social media applications that can be integrated into different areas of marketing activities.

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Article
Publication date: 11 July 2019

Andreas Hinterhuber and Bernard Quancard

This paper aims to discuss the changing role of the strategic account manager (SAM).

Abstract

Purpose

This paper aims to discuss the changing role of the strategic account manager (SAM).

Design/methodology/approach

This paper takes the form of an interview.

Findings

SAMs, in the future, will be ecosystem captains capable of managing complex relationships and teams, of organizing data and of telling stories with analytics. SAMs in the future will be assessed along with a set of metrics that it is similar to metrics of how top management consultants are evaluated: activities, competencies, intermediary results, sales/margins and quantified business value.

Originality/value

This interview discusses the current and future best practices of strategic account management.

Details

Journal of Business Strategy, vol. 40 no. 4
Type: Research Article
ISSN: 0275-6668

Keywords

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