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

Digital Pricing Strategy: Capturing Value from Digital Innovations

Digital Pricing Strategy provides a best practice overview of how companies design, analyse and execute digital pricing strategies. Bringing together insights from academic and professional experts globally, the text covers essential areas of the value and pricing of data, platform pricing, pricing of subscriptions and monetization of the global environment. Case studies, examples and interviews from leading organizations, including Zuora, Honeywell, Relayr, Alcatel Lucent, ABB, Thales and General Electric, illustrate key concepts in practice. To aid student learning, chapter objectives, summaries and key questions feature in every chapter, alongside PowerPoint slides and a test bank available online for lecturers. Comprehensive and applied in its approach, this text provides postgraduate, MBA and Executive Education students with an understanding of the capabilities, processes and tools that enable executives to effectively implement digital transformations and capture value from digital innovations

Hinterhuber 2004) and pricing practitioners (Forbis and Mehta

ABSTRACT The current literature is largely silent on how executives interpret the concept of value-based pricing. Although only a minority of companies adopts value-based pricing approaches, little is known about antecedents of alternative pricing approaches. We suggest this may be because of the fact that few professionals possess an understanding of value-based pricing, which is both academically rigorous as well as practically relevant. Our interviews with 44 executives in 15 US industrial firms show that those practicing value-based pricing interpret customer value in ways fully consistent with the current academic literature. Those practicing cost-or competition-based pricing, however, show a poor understanding of value-based pricing, which may explain why their companies practice cost-or competition-based approaches. Journal of Revenue and Pricing Management (2012) 11, 12-34. doi:10.1057/rpm.2011 Keywords: pricing; industrial firms; value-based pricing; managerial cognition ON THE LOW ADOTOPTION OF VALUE-BASED PRICING Of the three main approaches to pricing in industrial markets -cost-based, competitionbased and value-based -the last is considered superior by most marketing scholar

Introduction

This book includes 25 chapters organized in five sections

Is innovation in pricing your next source of competitive advantage?

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)

The micro-foundations of pricing

In this editorial we define the core research questions that fall into the domain of this special issue: Research on the micro-foundations of pricing aims to explore how individual traits or individual activities influence pricing activities or performance at the organizational level. As current research and the papers in this special issue suggest, adopting a micro-level perspective is necessary to building better theories: Organizations do not act, individuals do. Understanding the complex causal relationships between individual traits and behaviors and organizational outcomes is of interest to both researchers and managers. It is our hope that this special issue on micro-foundations, on fallible and not easy to model traits, cognition, and decisions, advance the theory and practice of pricing. (C) 2017 Elsevier Inc. All rights reserved