IDEAS home Printed from https://ideas.repec.org/a/eee/bushor/v62y2019i1p117-128.html
   My bibliography  Save this article

Make pricing power a strategic priority for your business

Author

Listed:
  • Liozu, Stephan M.

Abstract

In the face of rising business complexity and competitive pressure, many firms succumb to price pressures and enter pricing wars. Others focus on creating, quantifying, and capturing pricing power from their market. Since 2011, with help from Warren Buffet and Jim Cramer, Wall Street financial analysts have begun paying close attention to firms with great pricing power. But what is pricing power? How do firms know whether they have it? And how does it affect profit? This research, based on a survey of 128 organizations, identifies and validates the drivers of pricing power and its impact on firm performance. In this article, I create and validate a pricing power assessment instrument that firms can use to get started. This article offers practical recommendations for go-to-market functions on how to start the pricing power discussion, how to measure it, and how to operationalize it.

Suggested Citation

  • Liozu, Stephan M., 2019. "Make pricing power a strategic priority for your business," Business Horizons, Elsevier, vol. 62(1), pages 117-128.
  • Handle: RePEc:eee:bushor:v:62:y:2019:i:1:p:117-128
    DOI: 10.1016/j.bushor.2018.09.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S000768131830154X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.bushor.2018.09.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vrinda Kadiyali & Pradeep Chintagunta & Naufel Vilcassim, 2000. "Manufacturer-Retailer Channel Interactions and Implications for Channel Power: An Empirical Investigation of Pricing in a Local Market," Marketing Science, INFORMS, vol. 19(2), pages 127-148, September.
    2. Aradhna Krishna & Fred M. Feinberg & Z. John Zhang, 2007. "Should Price Increases Be Targeted?--Pricing Power and Selective vs. Across-the-Board Price Increases," Management Science, INFORMS, vol. 53(9), pages 1407-1422, September.
    3. Nikolay Archak & Anindya Ghose & Panagiotis G. Ipeirotis, 2011. "Deriving the Pricing Power of Product Features by Mining Consumer Reviews," Management Science, INFORMS, vol. 57(8), pages 1485-1509, August.
    4. Andreas Krämer & Martin Jung & Thomas Burgartz, 2016. "A Small Step from Price Competition to Price War: Understanding Causes, Effects and Possible Countermeasures," International Business Research, Canadian Center of Science and Education, vol. 9(3), pages 1-13, March.
    5. Stephan M. Liozu, 2017. "State of value-based-pricing survey: Perceptions, challenges, and impact," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 18-29, February.
    6. Hinterhuber, Andreas, 2017. "Value quantification capabilities in industrial markets," Journal of Business Research, Elsevier, vol. 76(C), pages 163-178.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liozu, Stephan & Hinterhuber, Andreas, 2022. "Pricing as a driver of profitable growth: An agenda for CEOs and senior executives," Business Horizons, Elsevier, vol. 65(4), pages 457-467.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hinterhuber, Andreas & Kienzler, Mario & Liozu, Stephan, 2021. "New product pricing in business markets: The role of psychological traits," Journal of Business Research, Elsevier, vol. 133(C), pages 231-241.
    2. Juan Feng & Xin Li & Xiaoquan (Michael) Zhang, 2019. "Online Product Reviews-Triggered Dynamic Pricing: Theory and Evidence," Information Systems Research, INFORMS, vol. 30(4), pages 1107-1123, December.
    3. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    4. Cotterill, Ronald & Cohen, Michael & Tian, Li, 2006. "Private Labels: Supermarket Chain Buyer Power in Action," Research Reports 149188, University of Connecticut, Food Marketing Policy Center.
    5. Joe Cox & Daniel Kaimann, 2013. "The Signaling Effect of Critics - Evidence from a Market for Experience Goods," Working Papers CIE 68, Paderborn University, CIE Center for International Economics.
    6. Pradeep Chintagunta & Jean-Pierre Dubé & Vishal Singh, 2003. "Balancing Profitability and Customer Welfare in a Supermarket Chain," Quantitative Marketing and Economics (QME), Springer, vol. 1(1), pages 111-147, March.
    7. Henri Kuokkanen & Jean-Pierre Van der Rest, 2022. "Game—Gimme a Better Price! A Negotiation Role Play on B2B Pricing in Hotel Revenue Management," INFORMS Transactions on Education, INFORMS, vol. 23(1), pages 46-55, September.
    8. Baxendale, Shane & Macdonald, Emma K. & Wilson, Hugh N., 2015. "The Impact of Different Touchpoints on Brand Consideration," Journal of Retailing, Elsevier, vol. 91(2), pages 235-253.
    9. Chung-Yi Lin & Shu-Yi Liaw & Chao-Chun Chen & Mao-Yuan Pai & Yuh-Min Chen, 2017. "A computer-based approach for analyzing consumer demands in electronic word-of-mouth," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(3), pages 225-242, August.
    10. Hanyang Luo & Sijia Cheng & Wanhua Zhou & Sumin Yu & Xudong Lin, 2021. "A Study on the Impact of Linguistic Persuasive Styles on the Sales Volume of Live Streaming Products in Social E-Commerce Environment," Mathematics, MDPI, vol. 9(13), pages 1-21, July.
    11. Wu, Xingli & Liao, Huchang, 2021. "Modeling personalized cognition of customers in online shopping," Omega, Elsevier, vol. 104(C).
    12. Minnema, Alec & Bijmolt, Tammo H.A. & Gensler, Sonja & Wiesel, Thorsten, 2016. "To Keep or Not to Keep: Effects of Online Customer Reviews on Product Returns," Journal of Retailing, Elsevier, vol. 92(3), pages 253-267.
    13. Gala, Kaushik & Schwab, Andreas & Mueller, Brandon A., 2024. "Star entrepreneurs on digital platforms: Heavy-tailed performance distributions and their generative mechanisms," Journal of Business Venturing, Elsevier, vol. 39(1).
    14. Yupin Yang & Mengze Shi & Avi Goldfarb, 2009. "Estimating the Value of Brand Alliances in Professional Team Sports," Marketing Science, INFORMS, vol. 28(6), pages 1095-1111, 11-12.
    15. Gielens, Katrijn & Steenkamp, Jan-Benedict E.M., 2019. "Branding in the era of digital (dis)intermediation," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 367-384.
    16. Eric T. Anderson & Duncan I. Simester, 2001. "Are Sale Signs Less Effective When More Products Have Them?," Marketing Science, INFORMS, vol. 20(2), pages 121-142, March.
    17. Jiyeon Hong & Paul R. Hoban, 2022. "Writing More Compelling Creative Appeals: A Deep Learning-Based Approach," Marketing Science, INFORMS, vol. 41(5), pages 941-965, September.
    18. Hong Zheng & Lin Tian & Guo Li, 2023. "A bane or a boon? Profit‐margin‐guarantee contract in a channel with downstream competition," Production and Operations Management, Production and Operations Management Society, vol. 32(7), pages 2087-2100, July.
    19. Gökçe Esenduran & James A. Hill & In Joon Noh, 2020. "Understanding the Choice of Online Resale Channel for Used Electronics," Production and Operations Management, Production and Operations Management Society, vol. 29(5), pages 1188-1211, May.
    20. Yabing Jiang & Hong Guo, 2012. "Design of Consumer Review Systems and Product Pricing," Working Papers 12-10, NET Institute.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bushor:v:62:y:2019:i:1:p:117-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/bushor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.