Value-based pricing is often recommended as superior pricing strategy (e.g. Dolan & Simon, 1996; Hinterhuber, 2008; Liozu et al., 2012; Marn et al., 2004; Monroe, 2003). However, while many studies provide detailed analytical recommendations on how to identify customer value and competitor prices (Forbis & Mehta, 1981; Kortge & Okonkwo, 1993; Marn et al., 2004; Monroe, 2003; Shapiro & Jackson, 1978; Smith & Nagle, 2005), the internal coordination and control mechanisms that determine firms’ ability to implement value-based pricing are often more vaguely described. 1 For example, coordination and cooperation between different business departments (Dolan, 1995; Dutta et al., 2002; Lancioni, 2005b; Lancioni et al., 2005; Monroe, 2003; Nagle & Holden, 2002; Vogel et al., 2002) is identified as a key success factor for a more effective pricing but seldom elaborated. This is troubling since prior studies have found that firms often find it difficult to replace less effective pricing strategies, such as cost-based pricing and competition-based pricing, with value-based pricing (Hinterhuber, 2008). One reason for this may be that firms lack clearly specified authority levels for granting list price discounts to customers and systems for monitoring the sales force (Hallberg, 2017a; Johansson et al., 2012; Stephenson et al., 1979).
|Title of host publication||Innovation in Pricing|
|Subtitle of host publication||Contemporary Theories and Best Practices, Second Edition|
|Number of pages||18|
|Publication status||Published - 2017 Jan 1|
Subject classification (UKÄ)