Factors that contribute to managers becoming engaged in unintentional price war

Rick Cardot (), Dick Boland () and Stephan M. Liozu ()
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Rick Cardot: Case Western Reserve University
Dick Boland: Case Western Reserve University
Stephan M. Liozu: Case Western Reserve University

Journal of Revenue and Pricing Management, 2021, vol. 20, issue 4, No 4, 410-419

Abstract: Abstract Despite understanding that price wars should be avoided and consensus among the pricing managers in our study, there remains a high reported incidence of price wars. The literature is silent about what factors lead well-educated pricing managers into price wars despite their desire to avoid them. This qualitative inquiry involved semi-structured interviews with 25 pricing managers across five industries. Our findings confirm that pricing managers have a strong desire to avoid price wars and confirm that pricing managers frequently blame competitors for aggressive pricing action. Additionally, we identify several common characteristics among the study participants. Pricing managers do not recognize value adjusted price competition as a price war. Pricing managers modify the definition of a price war in order to ensure their own actions and circumstances do not fit their definition of a price war. Finally, practitioners lack a widely accepted definition of price war.

Keywords: Pricing; Pricing strategy; Decision making theory; Value-based pricing (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41272-021-00305-2

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