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Industry-Specific Factors Impeding the Implementation of Value-Based Pricing

Author

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  • Florian Steinbrenner

    (Mendel University in Brno, Czech Republic)

  • Jana Turčínková

    (Mendel University in Brno, Czech Republic)

Abstract

Value-based pricing (VBP) is often considered the most profitable pricing method. However, VBP is rarely implemented by companies. This research study asks the question Why? and investigates the obstacles to an implementation of VBP. The objectives of this paper are to provide an assessment of customer-based obstacles to implement VBP in four different German industries and to evaluate the degree of company-based obstacles by industry. For that purpose, 792 consumer questionnaires were collected and 20 expert interviews were conducted. The results show that the technology industry is the German industry with the lowest obstacles, while the pharmaceutical industry experiences the strongest obstacles. The degree of obstacles varies significantly by industry. This study contributes to theory by taking both a customer perspective and a business perspective towards VBP while identifying the degree of the obstacles to implement VBP by industry. This paper allows future researchers and business practitioners to assess the industry-specific obstacles and take appropriate measures to overcome them.

Suggested Citation

  • Florian Steinbrenner & Jana Turčínková, 2021. "Industry-Specific Factors Impeding the Implementation of Value-Based Pricing," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 7(1), pages 27-46.
    • Handle: RePEc:men:journl:v:7:y:2021:i:1:p:27-46
    DOI: 10.11118/ejobsat.2021.004
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    References listed on IDEAS

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    1. Paul Ingenbleek & Marion Debruyne & Ruud T. Frambach & Theo M. M. Verhallen, 2003. "Successful New Product Pricing Practices: A Contingency Approach," Marketing Letters, Springer, vol. 14(4), pages 289-305, December.
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    3. Michael Drummond & Adrian Towse, 2019. "Is rate of return pricing a useful approach when value-based pricing is not appropriate?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 945-948, September.
    4. 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.
    5. Forbis, John L. & Mehta, Nitin T., 1981. "Value-based strategies for industrial products," Business Horizons, Elsevier, vol. 24(3), pages 32-42.
    6. Peter M. Noble & Thomas S. Gruca, 1999. "Industrial Pricing: Theory and Managerial Practice," Marketing Science, INFORMS, vol. 18(3), pages 435-454.
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    Cited by:

    1. Erdmann, Anett & Mas, José Manuel & de Obesso, Mercedes, 2023. "Disruptive technologies: How to influence price sensitivity triggering consumers’ behavioural beliefs," Journal of Business Research, Elsevier, vol. 158(C).

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    More about this item

    Keywords

    value; pricing; implementation; obstacles; strategy;
    All these keywords.

    JEL classification:

    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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