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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

Keywords

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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: 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

Keywords

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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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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

Keywords

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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

Keywords

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Article
Publication date: 11 March 2014

Paul T.M. Ingenbleek

In the mainstream normative pricing literature, value assessment is virtually non-existent. Although the resource-based literature recognizes that pricing is a competence…

Abstract

Purpose

In the mainstream normative pricing literature, value assessment is virtually non-existent. Although the resource-based literature recognizes that pricing is a competence, value-informed pricing practices are still weakly grounded in theory. The purpose of this paper is to strengthen the theoretical grounds of such pricing practices.

Design/methodology/approach

The paper applies the emerging service-dominant logic of marketing to pricing. More specifically, it apples the ten foundational premises of service-dominant logic to pricing and it places pricing in the frameworks of one of the major building blocks of service-dominant logic, namely the resource-advantage theory of competition.

Findings

From a service-dominant perspective, price is the reward for the application of specialized knowledge and skills. Pricing is an operant resource, or competence, that assesses customer value, applies it in multi-dimensional price propositions, and implements it in processes of co-creating prices with customers. Value-informed pricing is the central pricing practice within such competences.

Practical implications

Prices vary among others between “good” and “bad”, firms generate competitive advantage not only through value creation, but also through pricing. Learning is key to develop pricing competences.

Originality/value

This paper is the first to ground value-informed pricing at high levels of abstraction in general marketing theory.

Details

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

Keywords

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Article
Publication date: 11 March 2014

Francois Duhamel, Sophie Reboud and Michel Santi

The purpose of this paper is to devise recommendations for firms to formulate modes of value capture for their product innovations, ex ante. More specifically, the…

Abstract

Purpose

The purpose of this paper is to devise recommendations for firms to formulate modes of value capture for their product innovations, ex ante. More specifically, the research question is: how can innovators try to maximize, ex ante, the appropriation of the rent they can derive from their innovating projects?

Design/methodology/approach

A theoretical framework is developed and proposed to assess modes of value capture of product innovations and two illustrations are provided to show how the framework can work in practice for innovation projects.

Findings

This paper presents a practitioner's view based on the development of an original concept of rent configuration and appropriable rent.

Research limitations/implications

In terms of research limitations, the possible endogeneity of intellectual property protection and the timing of were not considered.

Practical implications

The framework allows a set of predictions regarding modes of value capture for product innovators.

Originality/value

The paper's contribution lies in the proposal of an integrative framework based on the concept of rent configuration, separating analytically three dimensions of innovation value, namely volume, profit and duration. This concept allows the authors to present a richer set of recommendations in comparison to previous frameworks, in order to avoid adopting the form of a yes/no decision tree that tends to over simplify the issues at stake. The authors also contemplate not only erosion effects, but also amplification effects on the rent, which constitutes another contribution of this paper.

Details

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

Keywords

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Article
Publication date: 11 March 2014

Suvi Nenonen and Kaj Storbacka

The last two decades have seen a surge of interest in the concept of value in business markets. Furthermore, extant literature suggests that value capture can be…

Abstract

Purpose

The last two decades have seen a surge of interest in the concept of value in business markets. Furthermore, extant literature suggests that value capture can be conceptualized as the return on the firm's customer assets. However, the existing customer asset management literature has a strong bias towards consumer markets. Thus, the purpose of this paper is to create a conceptual framework for managing customer assets for improved value capture in a business market context, and to illustrate the use of the framework empirically.

Design/methodology/approach

The authors approach the topic with conceptual development and a longitudinal case illustration from a globally operating forestry product firm.

Findings

The findings of the study indicate that B2B firms can increase their value capture by dividing their customer base into customer portfolios, which are managed with differentiated customer management concepts targeted to increase the economic profit contribution of each customer portfolio.

Practical implications

The business practitioners in B2B contexts are likely to find the proposed customer portfolio approach to managing the customer assets more approachable than the prevailing customer lifetime models. In order to gain maximum value capture benefits from portfolio-specific customer management concepts, they should be approached cross-functionally instead of limiting them to the domains of marketing and sales.

Originality/value

The study contributes to literature on value capture and customer asset management by providing a framework for managing customer assets for increased value capture that is applicable to business markets and circumvents the majority of challenges associated with the customer lifetime value models.

Details

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

Keywords

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Article
Publication date: 11 March 2014

Hannu Makkonen and Hanna Komulainen

The purpose of this paper is to shed light on perceived value for the participating actors during the new service development (NSD) process. The authors are particularly…

Abstract

Purpose

The purpose of this paper is to shed light on perceived value for the participating actors during the new service development (NSD) process. The authors are particularly interested in how participant value emerges in a multi-actor NSD process and how it can be conceptualized.

Design/methodology/approach

The empirical research design comprised three extensive living lab experiments in a real end-user environment over a three years period.

Findings

The study is illustrative by its nature and advances two main arguments through conceptual analysis and empirical illustration: NSD can be seen as the identification of actual and emerging needs and technologies and their matching; and the matching process builds on the interaction between the participants and is characterized by their individual motives to leverage the NSD process for value-in-context.

Practical implications

A careful investigation of the different stakeholders' expectations of the NSD process provides a basis on which to create lucrative value propositions instead of approaching potential stakeholders with technology- or product-centric arguments.

Originality/value

The paper opens avenues for further research to develop the current conceptualizations of NSD in launching the new service emergence perspective.

Details

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

Keywords

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