A framework for strategic industrial pricing

doi:10.1016/0019-8501(79)90022-1

Industrial Marketing Management

Volume 8, Issue 1, January 1979, Pages 75-80

https://doi.org/10.1016/0019-8501(79)90022-1 Get rights and content

Abstract

A model for pricing decision making in an industrial setting is described. Written from the perspective of a price setter, the model starts with an evaluation of the relative strengths and weaknesses of both buyer and seller. These evaluations are then input into a strategic framework, which integrates tactical considerations with several environmental concerns. The article concludes with a set of strategic pricing alternatives, in a matrix form, to be used by price negotiators and pricing executives of industrial companies.

References (9)

Perreault et al.
Physical Distribution Service in Industrial Purchase Decisions
J. Market.
(April 1976)
R.F. Lanzillotti
Pricing Objectives in Large Companies
Amer. Economic Rev.
(Dec. 1958)
Gilbert Burck
The Myths and Realities of Corporate Pricing
Fortune
(April 1972)
Joel Dean
Pricing Policies for New Products
Harv. Bus. Rev.
(November 1950)
Harv. Bus. Rev.
(Nov. 1954–Dec. 1976)

There are more references available in the full text version of this article.

Cited by (20)

Delegation of pricing authority to the sales force: An agency-theoretic perspective of its determinants and impact on performance
2010, International Journal of Research in Marketing
In industrial selling situations, the questions of what factors drive pricing authority delegation to salespeople and under what conditions price delegation is beneficial for the firm are often asked. To advance knowledge in this area, we (1) develop and empirically test a framework of important drivers of price delegation based on agency-theoretic research and (2) investigate the impact of price delegation on firm performance, taking into account agency theory variables as potential moderators. The study is based on data from a sample of 181 companies from the industrial machinery and electrical engineering industry in Germany. The results indicate that the degree of pricing delegation increases as information asymmetry between the salesperson and sales manager increases and as it becomes more difficult to monitor salespeople's efforts. Conversely, risk-aversion of salespeople is negatively related to the degree of price delegation. Furthermore, we find a positive effect of price delegation on firm performance, which is amplified when market-related uncertainty is high and when salespeople possess better customer-related information than their managers. Hence, our results clearly show that rigid, “one price fits all” policies are inappropriate in many B2B market situations. Instead, sales managers should grant their salespeople sufficient leeway to adapt prices to changing customer requirements and market conditions, especially in firms that operate in highly uncertain selling environments.
Customer-oriented invoicing in exporting
2000, Industrial Marketing Management
Invoicing practices for export transactions vary considerably around the world. This study examines invoicing patterns in firms with regard to their customer-orientation tendencies in three countries. Specifically, the extent of foreign currency invoicing and the degree to which firms pursue customer-oriented currency policies are investigated. Customer orientation with regard to export invoicing is also explored in terms of a series of firm-specific and market-related variables. Results indicate that foreign currency invoicing in export transactions varies across markets. More importantly, exporters using a foreign currency are significantly more customer oriented than those using their home currencies. Also, exporters using the buyer's currency have a significantly higher customer-orientation score than those using a third currency. Significant differentiating factors for customer-oriented exporters include countries of origin, bargaining position, and active involvement in exporting. Finally, customer-oriented exporters using a home currency apparently offer various incentives to buyers willing to assume the currency risk. Implications and future research directions are discussed.
Strategic pricing in export markets: Empirical evidence from the UK
2000, International Business Review
This study was initiated by the apparent conceptual and empirical neglect of the industrial export pricing area. Capitalising upon calls for a strategic pricing orientation in contemporary firms the study seeks to empirically explore the export pricing practices of industrial exporters in the UK and assess their influence upon their strategic export pricing. The aggregated experience of 178 firms suggests that proactive exporting stimuli, market orientation, formality of the pricing decision process and a balanced attention to customer needs and the profit potential of the exporting activity are practices identifiable in firms with a high strategic pricing orientation. This new empirical evidence is discussed in terms of its contribution for export managers, public policy makers and researchers wishing to advance further our knowledge of this critical area of marketing activity.
Contributions to marketing theory and practice from industrial marketing management
1997, Journal of Business Research
During its first twenty-four years of publication, Industrial Marketing Management has been at the forefront of development of marketing thought applied to industrial, high-tech, and business-to-business market environments. Over 900 articles have appeared concerned with topics such as: marketing strategy and planning, marketing management, industrial buyer behavior, sales and sales management, marketing research, product development, pricing and others. As its name implies, over thirty percent of Industrial Marketing Management's articles have focused on the management of marketing and sales functions. This article presents highlights of outstanding articles from IMM's past arranged by major topical area: marketing management, market segmentation, strategic marketing planning, selling and sales management, purchasing and industrial buying behavior, global and international industrial, researching industrial markets, innovation and new product development, distribution, pricing, and promotions and advertising.
Pricing imitative new products
1991, Industrial Marketing Management
This article develops an operational procedure for pricing an imitative new product that targets business customers. We view entry pricing as a component of overall entry strategy and suggest that an effective pricing must be consistent with the product's user-benefit, market-entry time, and overall positioning strategy. The results confirm that the entry price is positively associated with the product's user-benefit and negatively related to the product's entry time.
Market-based pricing: Beyond price-performance curves
1990, Industrial Marketing Management

View all citing articles on Scopus

^∗: Subhash C. Jain is Professor of Marketing and Assistant Dean for Research and Management Development Programs at the School of Business Administration, University of Connecticut. He also served on the faculty at the University of Dayton and the Indian Institute of Management in Ahmedabad. Professor Jain earned his Ph.D. degree in Marketing from the University of Oregon and has taught in management development programs in Switzerland, India, and the United States.

^∗∗: Michael V. Laric is a member of the faculty at the University of Connecticut, Dr. Laric holds a B.A. in Economics and Political Science and an M.A. in Finance, both from the Hebrew University of Jerusalem, Israel. He received his Ph.D., in Marketing from the City University of New York.

View full text

A framework for strategic industrial pricing

Abstract

J. Market.

Pricing Objectives in Large Companies

Amer. Economic Rev.

The Myths and Realities of Corporate Pricing

Fortune

Pricing Policies for New Products

Harv. Bus. Rev.

Harv. Bus. Rev.