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The European pricing time bomb: And how to cope with it

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  • Simon, Hermann
  • Kucher, Eckhard

Abstract

Future European price levels will be markedly lower than current ones; they could fall to the lowest of what are huge price differentials between countries. This is the 'pricing time bomb' European companies are facing. Hermann Simon and Eckhard Kucher argue strongly against any premature unifying or European prices, even if Europe-wide product or brand policies would seem to require it. Profits will only be sacrificed. Certain price differentials should be retained. The authors suggest a compromise between individually optimised prices in each country and a uniform European price: the 'European price corridor'. It is the only solution which takes account of country-specific differences in prices as well as the unifying effect of disappearing barriers between countries. They also suggest that companies should act on implementing this in the immediate future.

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  • Simon, Hermann & Kucher, Eckhard, 1992. "The European pricing time bomb: And how to cope with it," European Management Journal, Elsevier, vol. 10(2), pages 136-145, June.
    • Handle: RePEc:eee:eurman:v:10:y:1992:i:2:p:136-145
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    Cited by:

    1. Reza Ahmadi & B. Rachel Yang, 2000. "Parallel Imports: Challenges from Unauthorized Distribution Channels," Marketing Science, INFORMS, vol. 19(3), pages 279-294, March.
    2. Cremer, Jörg, 1997. "A generalization of spin glass theory in marketing: the coordination of interdependent country markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 246(3), pages 377-384.
    3. Romero, Jaime & Cruz-Roche, Ignacio & Charron, Jean-Philippe, 2020. "The myth of price convergence under economic integration: A proposed explanation for the difference in food prices across European countries," European Management Journal, Elsevier, vol. 38(2), pages 267-276.

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