Towards value-based pricing—An integrative framework for decision making

Despite a recent surge of interest, the subject of pricing in general and value-based pricing in particular has received little academic investigation. Yet, pricing has a huge impact on financial results, both in absolute terms and relative to other instruments of the marketing mix. The objective of...

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Bibliographic Details
Published in:Industrial marketing management 2004-11, Vol.33 (8), p.765-778
Main Author: Hinterhuber, Andreas
Format: Article
Language:English
Subjects:
Business
Chemical industry
Cost volume profit
Costs
Decision making
Economic analysis
Economic value analysis
Integrated approach
Market theory
Pricing
Pricing policies
Product introduction
Profit
Theory
Value
Value-based pricing
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Summary:Despite a recent surge of interest, the subject of pricing in general and value-based pricing in particular has received little academic investigation. Yet, pricing has a huge impact on financial results, both in absolute terms and relative to other instruments of the marketing mix. The objective of this paper is to present a comprehensive framework for pricing decisions which considers all relevant dimensions and elements for profitable and sustainable pricing decisions. The theoretical framework is useful for guiding new product pricing decisions as well as for implementing price-repositioning strategies for existing products. The practical application of this framework is illustrated by a case study involving the pricing decision for a major product launch at a global chemical company.
ISSN:0019-8501
1873-2062
DOI:10.1016/j.indmarman.2003.10.006