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State of value-based-pricing survey: Perceptions, challenges, and impact

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  • Stephan M. Liozu

    (Case Western Reserve University)

Abstract

While value-based pricing remains the most talked about and taught pricing orientation, it is also the most difficult pricing orientation to deploy in organizations. For the past 5 years, scholars have continued to recommend the adoption of value-based pricing while at the same time exploring the reasons for its continued low adoption and high rate of failure. We surveyed 144 pricing professionals in 144 distinct organizations to understand the current state of the value-based-pricing practice. We explore perceptions and challenges, and further validate the impact of value-based pricing on margins. We also identify the key drivers of the impact of value-based pricing on the business unit profitability and pricing power. Our results show that we still have a long road ahead with the increased adoption of value-based pricing as a primary pricing orientation. While perceptions have improved, there remain critical difficulties in deploying this methodology in firms. With this study, we intended to continue the discussion on the necessity to pay attention to customer value and also provide additional knowledge to practitioners willing to get started on the journey toward pricing excellence.

Suggested Citation

  • 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.
    • Handle: RePEc:pal:jorapm:v:16:y:2017:i:1:d:10.1057_s41272-016-0059-8
    DOI: 10.1057/s41272-016-0059-8
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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. Ingenbleek, Paul & Debruyne, Marion & Frambach, Ruud T., 2001. "On cost-informed pricing and customer value: a resource-advantage perspective on industrial innovation pricing practices," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    4. Forbis, John L. & Mehta, Nitin T., 1981. "Value-based strategies for industrial products," Business Horizons, Elsevier, vol. 24(3), pages 32-42.
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    Cited by:

    1. Liozu, Stephan M., 2019. "Make pricing power a strategic priority for your business," Business Horizons, Elsevier, vol. 62(1), pages 117-128.
    2. 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.
    3. Boccali, Filippo & Mariani, Marcello M. & Visani, Franco & Mora-Cruz, Alexandra, 2022. "Innovative value-based price assessment in data-rich environments: Leveraging online review analytics through Data Envelopment Analysis to empower managers and entrepreneurs," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    4. 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.
    5. Christen, Tatjana & Hess, Manuel & Grichnik, Dietmar & Wincent, Joakim, 2022. "Value-based pricing in digital platforms: A machine learning approach to signaling beyond core product attributes in cross-platform settings," Journal of Business Research, Elsevier, vol. 152(C), pages 82-92.
    6. Florian Steinbrenner & Jana Turčínková, 2021. "The Value-Based Pricing Determination Matrix for Pricing Method Selection," Central European Business Review, Prague University of Economics and Business, vol. 2021(4), pages 99-123.

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