Strategic B2B pricing

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Pricing as a driver of profitable growth: An agenda for CEOs and senior executives

Most CEOs take a narrow, tactical view of pricing and delegate pricing to lower levels of the organization. This myopic approach is costly, as it prevents companies from realizing their potential. In the hands of the best-run companies, pricing is not a battlefield tactic to win a particular competitive skirmish but a transformative long-term strategy for sustained competitive advantage. We present an agenda of six specific action items that defines how to unlock the power of pricing. CEOs and senior executives, our research suggests, should not set prices, but instead, they should create the context, the capabilities, the behaviors, the infrastructure, and the aspirations that enable their organization to excel in pricing

Pricing and CEOs: why top executives need to get involved

Purpose: Despite its increased adoption by small, medium and large firms, pricing continues to be ignored in the C-suite. C-suite executives have minimal understanding of what pricing can do and how it impacts a firm’s performance. After two years in the COVID-19 pandemic and the resulting economic crisis, consultants agree that the next wave of strategies and business models will require the development of strategic pricing capabilities, including analytics and software. Design/methodology/approach: The authors conducted 49 interviews with CXOs, VPs of pricing and CEOs of pricing software vendors to understand how the best-performing companies use pricing to drive profits and select pricing technologies. Then, supported by the Professional Pricing Society, the world’s largest organization dedicated to pricing, the authors conducted a 2020 survey of 540 pricing professionals to understand the perceptions of pricing in the C-suite and how top executives prioritize pricing investments. The authors complemented their own research with analysis of publicly available data, analyst presentations and public comments by CEOs on pricing. Findings: The authors propose a portfolio of 15 activities to include in the CEO’s strategic agenda and 10 actions to get started with in the short term. The next normal will not be based on business-as-usual. For the next three to five years, developing strategic pricing capabilities will give firms a competitive advantage over those who continue to neglect this hidden gem. Originality/value: In the context of the accelerating economic recovery, the authors address one of the most pressing priority for the C-suite. The authors focus on a series of actions and activities that the C-suite can take to accelerate recovery and focus on profitable growth

Configurational theory and practices of firms employing multiple pricing policies: assessing effective and ineffective pricing recipes in multiple firm contexts

This study examines the presence and impact of complex alternative organizational configurations of pricing on firm performance. The dataset is from a survey of company owners and company CEOs, of which a subsample was used previously and analyzed with multiple regression analysis. Analyzing an enlarged dataset that includes new data using fuzzy-set qualitative comparative analysis (fsQCA) supports the perspective that multiple price policy paths are identifiable for indicating high performance for different firm operational contexts. By applying the perspective of complex interdependences of specific pricing activities and specific organizational configurations related to pricing, this study offers a nuanced contribution to marketing theory. To practicing managers, this study offers guidance for adopting specific configurations of pricing policies in specific contexts for achieving high firm performance as well as guidance on which configurations indicate negative firm performance outcomes

The relation between the producer and consumer price indices: a two-country study

© 2017, Macmillan Publishers Ltd., part of Springer Nature. Marketing managers are often in a dilemma about which pricing index to rely on while calculating the annual increase in the prices for their product. To provide insights that can reduce this dilemma, a critical comparison of the Producer Price index and consumer price index is called for. In this study, the relation between the Producer Price Index (PPI) and Consumer Price Index (CPI) was investigated through a comparison between Turkey and UK. Unlike many other previous studies, this study tried to determine the dominant pricing approach in an economy by examining the relation between the producer and consumer prices. In this context, VAR, impulse-response, variance decomposition, and Granger causality tests were used for the analyses of time series data. The results of study showed that there was bidirectional causality between the producer and consumer prices in both countries. Therefore, it was asserted that businesses in both countries generally apply mixed pricing approach. The results thus provide some interesting insights that can aid marketing managers in their pricing decisions

Why is a change of company pricing policy so hard to implement?

This paper analyzes the process of changing a competition-oriented room rate pricing approach into a company-wide value-based pricing process from the perspective of the resource-based view. From a sample of 33 hotels in 16 countries it evaluates data from 55 open-ended interviews, documentation and archival records. Employing systems methodology the study illustrates that pricing is an intra/inter-organizational activity involving cross-disciplinary processes at various hierarchical levels. It finds that changing to value-based pricing involves a remarkable level of especially intangible resources. The study identifies these resources and their impact, identifying how constraints and tensions influence the shift in pricing orientation. It suggests that pricing in a value-driven policy comprises a capability. Without this capability interpersonal realities and goal conflicts, most prominently between sales and revenue, are found to impose major effects on the alignment of functional levels, the change in pricing processes, and the degree to which these are really value-driven

The contingent effect of product relatedness on B2B firms’ pricing strategy. Evidence from India

This paper empirically examines the contingent effect of product-related diversification on B2B firms' pricing strategy. Drawing our arguments from the recent advances in corporate strategy (i.e., resource-based view of the firm and product diversification strategy) and industrial marketing literatures, we argue that product-related diversifiers are more capable in adopting a high rather than a low pricing strategy. We also contend that this relationship will be positively moderated by a number of firm-specific factors, namely a firm's ability to establish high barriers to entry in its focal industry, as well as its strategic decision to invest in promotion strategy. We test our hypotheses against primary data collected from India. The data consists of a cross section from 127 domestic firms and subsidiaries of foreign MNEs operating in the chemicals / pharmaceuticals and the electronics industry. The results provide support for all the aforementioned hypotheses