IDEAS home Printed from https://ideas.repec.org/a/ris/utmsje/0275.html
   My bibliography  Save this article

Meeting Halfway — Comparison Between Cost-Based And Demand-Based Pricing Methods

Author

Listed:
  • Vujicic, Maja

    (t, Faculty of Economics and Business, University of Rijeka)

  • Vujicic-Tomic, Brankica

    (t, Faculty of Economics and Business, University of Rijeka)

  • Klaric, Mia

    (Sensum Ltd., Rijeka, Croatia.)

Abstract

The research analyses two perspectives of pricing methods — the accounting and the marketing one. The research purpose is to analyse both ways and find out how reasonable price is formed — meaning fairly for both the company and the customer. The literature is analysed and the most important is to stress understanding the power of consumers and their possibility to influence price formation. The analysis was conducted in a part of services, precisely, in focus of the analysis were language schools and courses that they are offering. The field research included three parts: survey method, interview with the owner of one of the language schools in the Republic of Croatia and analysis of language schools’ web-pages for the purpose of making a price calculation. The results have shown that for the same offer (class type and number of teaching hours), following the cost-based pricing method, the price is much higher than following the value-based pricing method. The importance of this study is demonstrated in opposites between perspectives and stressing that for survival on market it is crucial to be focused on market research, finding out customers’ perspectives and adapting to it.

Suggested Citation

  • Vujicic, Maja & Vujicic-Tomic, Brankica & Klaric, Mia, 2019. "Meeting Halfway — Comparison Between Cost-Based And Demand-Based Pricing Methods," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 10(2), pages 215-225.
    • Handle: RePEc:ris:utmsje:0275
    as

    Download full text from publisher

    File URL: http://utmsjoe.mk/files/Vol.%2010%20No.%202/UTMSJOE-2019-1002-07-Vujicic-Vujicic-Tomic-Klaric.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yuan, Xuchuan & Hwarng, H. Brian, 2016. "Stability and chaos in demand-based pricing under social interactions," European Journal of Operational Research, Elsevier, vol. 253(2), pages 472-488.
    2. Arrigo, Ugo & Di Foggia, Giacomo, 2013. "Competition And Pricing Of Essential Inputs: The Case Ofaccess Charges For The Use Of The Italian Rail Infrastructure," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 4(3), pages 295-308.
    3. Dhananjay Nayakankuppam & Himanshu Mishra, 2005. "The Endowment Effect: Rose-Tinted and Dark-Tinted Glasses," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(3), pages 390-395, December.
    4. Shtudiner, Zeev & Klein, Galit & Zwilling, Moti & Kantor, Jeffrey, 2019. "The value of souvenirs: Endowment effect and religion," Annals of Tourism Research, Elsevier, vol. 74(C), pages 17-32.
    5. Chan, Eugene Y., 2015. "Endowment effect for hedonic but not utilitarian goods," International Journal of Research in Marketing, Elsevier, vol. 32(4), pages 439-441.
    6. Sheth, Jagdish N. & Newman, Bruce I. & Gross, Barbara L., 1991. "Why we buy what we buy: A theory of consumption values," Journal of Business Research, Elsevier, vol. 22(2), pages 159-170, March.
    7. Blut, Markus & Teller, Christoph & Floh, Arne, 2018. "Testing Retail Marketing-Mix Effects on Patronage: A Meta-Analysis," Journal of Retailing, Elsevier, vol. 94(2), pages 113-135.
    8. Robben, Henry S. J. & Verhallen, Theo M. M., 1994. "Behavioral costs as determinants of cost perception and preference formation for gifts to receive and gifts to give," Journal of Economic Psychology, Elsevier, vol. 15(2), pages 333-350, June.
    Full references (including those not matched with items on IDEAS)

    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. Xie, Guangming & Lü, Kevin & Gupta, Suraksha & Jiang, Yushi & Shi, Li, 2021. "How Dispersive Opinions Affect Consumer Decisions: Endowment Effect Guides Attributional Inferences," Journal of Retailing, Elsevier, vol. 97(4), pages 621-638.
    2. Liu, Runqiu & Jiang, Jian & Yu, Chao & Rodenbiker, Jesse & Jiang, Yongmu, 2021. "The endowment effect accompanying villagers' withdrawal from rural homesteads: Field evidence from Chengdu, China," Land Use Policy, Elsevier, vol. 101(C).
    3. Jebarajakirthy, Charles & Das, Manish & Maggioni, Isabella & Sands, Sean & Dharmesti, Maria & Ferraro, Carla, 2021. "Understanding on-the-go consumption: A retail mix perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    4. Wettstein, Dominik J. & Boes, Stefan, 2022. "How value-based policy interventions influence price negotiations for new medicines: An experimental approach and initial evidence," Health Policy, Elsevier, vol. 126(2), pages 112-121.
    5. Saarijärvi, Hannu & Mitronen, Lasse & Yrjölä, Mika, 2014. "From selling to supporting – Leveraging mobile services in the context of food retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 21(1), pages 26-36.
    6. Pengji Wang & Adrian T. H. Kuah & Qinye Lu & Caroline Wong & K. Thirumaran & Emmanuel Adegbite & Wesley Kendall, 2021. "The impact of value perceptions on purchase intention of sustainable luxury brands in China and the UK," Journal of Brand Management, Palgrave Macmillan, vol. 28(3), pages 325-346, May.
    7. Terason Sid, 2021. "Predicting Sports Facility Revisit Intentions Based on Experience and Mediating Effects of Perceived Value," Polish Journal of Sport and Tourism, Sciendo, vol. 28(3), pages 35-41, September.
    8. Debora Bettiga & Lucio Lamberti & Emanuele Lettieri, 2020. "Individuals’ adoption of smart technologies for preventive health care: a structural equation modeling approach," Health Care Management Science, Springer, vol. 23(2), pages 203-214, June.
    9. Morais, Ana Catarina & Ishida, Akira & Matsuda, Ruriko, 2024. "Ethical food consumption drivers in Japan. A S–O-R framework application using PLS-SEM with a MGA assessment based on clustering," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    10. Neringa Ivanauskiene & Vilte Auruškeviciene & Vida Skudiene & Sarunas Nedzinskas, 2012. "Customer perceptions of value: case of retail banking," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 3(1).
    11. Jin, Ting & Prentice, Catherine & Shao, Wei, 2021. "Identifying antecedent conditions for luxury brand purchase," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    12. Christiane Bradler & Susanne Neckermann, 2019. "The Magic of the Personal Touch: Field Experimental Evidence on Money and Appreciation as Gifts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1189-1221, July.
    13. Erica Mina Okada, 2010. "Uncertainty, Risk Aversion, and WTA vs. WTP," Marketing Science, INFORMS, vol. 29(1), pages 75-84, 01-02.
    14. Le Liu & Yinyun Yan & Xin Tian & Zuoliang Jiang, 2024. "Impact of Text and Image Information on Community Group Buying Performance: Empirical Evidence from Convenience Chain Stores," Sustainability, MDPI, vol. 16(11), pages 1-14, May.
    15. Anxin Xu & Chenwen Wei & Manhua Zheng & Lili Sun & Decong Tang, 2022. "Influence of Perceived Value on Repurchase Intention of Green Agricultural Products: From the Perspective of Multi-Group Analysis," Sustainability, MDPI, vol. 14(22), pages 1-17, November.
    16. Adis Puska & Admir Beganovic & Allen Popovic Beganovic, 2019. "Consumers' Loyalty Toward Dark Chocolate," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 28(1), pages 245-266, june.
    17. Park, JungKun & Ahn, Jiseon & Thavisay, Toulany & Ren, Tianbao, 2019. "Examining the role of anxiety and social influence in multi-benefits of mobile payment service," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 140-149.
    18. Mäntymäki, Matti & Salo, Jari, 2013. "Purchasing behavior in social virtual worlds: An examination of Habbo Hotel," International Journal of Information Management, Elsevier, vol. 33(2), pages 282-290.
    19. Yuhan Ge & Qing Yuan & Yaxi Wang & Keunsoo Park, 2021. "The Structural Relationship among Perceived Service Quality, Perceived Value, and Customer Satisfaction-Focused on Starbucks Reserve Coffee Shops in Shanghai, China," Sustainability, MDPI, vol. 13(15), pages 1-19, August.
    20. Park, Jungkun & Back, Seung Yub & Kim, Dongyoup, 2022. "Masstige consumption values and its effect on consumer behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).

    More about this item

    Keywords

    value for customer; service marketing; language course; cost accounting;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    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:ris:utmsje:0275. 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: Assistant Professor. Dejan Nakovski, PhD (email available below). General contact details of provider: https://edirc.repec.org/data/feutmmk.html .

    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.