Pricing Strategies in a Dynamic Market

Wingsun Li ()
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Wingsun Li: Beijing Normal University & Hong Kong Baptist University—United International College

Chapter Chapter 8 in Strategic Management Accounting in a Network Economy, 2023, pp 183-209 from Springer

Abstract: Abstract Setting prices is a complex decision-making process that involves various factors. It requires defining price objectives, understanding market segments, predicting market responses from competitors and customers, evaluating internal constraints such as costs or capacity, and considering the short-term and long-term financial implications. Price decisions can have both complementary and substitutional impacts on other sectors of a business. However, firms are not entirely free to determine prices as they are influenced by market forces and internal limitations. This chapter aims to discuss the strategic role of pricing in competitive markets, and provides a comprehensive understanding of the complexities and dynamics of pricing strategies and their implications for businesses. In particular, it explores major pricing strategies, including cost-based pricing, market-based pricing, and value-based pricing. Also, it examines the popularity of dynamic pricing as a short-term strategy. Value-based pricing, despite its significant interest in academic and practical contexts, has seen limited actual application compared to cost-based and market-based strategies. The chapter also explores the factors that constrain managerial discretion in pricing decisions.

Keywords: Target costing; Value-based costing; Market-based costing; Cost-based costing; Dynamic pricing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-981-99-5253-3_8

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DOI: 10.1007/978-981-99-5253-3_8

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