The six pricing myths that kill profits

Andreas Hinterhuber

Business Horizons, 2016, vol. 59, issue 1, 71-83

Abstract: Pricing is the most important driver of profits. Pricing is also, surprisingly, the area most executives overlook when implementing initiatives to increase profits. There is a reason: Research presented in this article suggests that most executives implicitly hold on to a series of weakly held assumptions about pricing that ultimately are self-defeating. These pricing myths are that (1) costs are the basis for price setting, (2) small price changes have little impact on profits, (3) customers are highly price sensitive, (4) products are difficult to differentiate, (5) high market share leads to high profits, and (6) managing price means changing prices. This research shows how executives can overcome these misconceptions and thus implement sustainable profit improvements via pricing.

Keywords: Pricing; Profitability; Misconceptions; Value-based pricing; Market share (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:59:y:2016:i:1:p:71-83

DOI: 10.1016/j.bushor.2015.09.002

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