Barriers to implementing value-based pricing in industrial markets: A micro-foundations perspective

Pekka Töytäri, Joona Keränen and Risto Rajala

Journal of Business Research, 2017, vol. 76, issue C, 237-246

Abstract: Value-based pricing has the potential to improve differentiation, profitability, and value creation for industrial firms and their customers. However, while most of the pricing research considers the ways organizations set or get value-based prices, only few studies consider how individual managers influence the pricing process and what prevents them from setting and getting value-based prices. This is of critical concern, since it is not just organizations, but individuals within organizations who make pricing decisions—and their decision-making is influenced by institutional pressures such as socially prescribed norms, rationalized meanings, and beliefs about profitable approaches to pricing. This study addresses this gap in the current knowledge by adopting a micro-foundations perspective to pricing, and focusing on the barriers that individual managers encounter when implementing value-based pricing. Drawing on a single case study in a global industrial firm, and from interviews with 24 managers, this study identifies 11 individually, organizationally, and externally induced barriers to value-based pricing. The study also sheds light on the potential sensegiving strategies for overcoming these barriers.

Keywords: Value-based pricing; Individual barriers; Institutional logic; Micro-foundations; Industrial markets (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:76:y:2017:i:c:p:237-246

DOI: 10.1016/j.jbusres.2016.04.183

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