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ABSTRACT  For the past 20 years, faced with increased business and pricing complexity, pricing scholars and practitioners have paid more and more attention to pricing capabilities. Grounded in resource-based view and capability-based view of the firm, pricing capabilities have moved over time from a non-existing concept to an emerging theory rich in both qualitative and quantitative research papers. From the mid-2000 to today,...
ABSTRACT Pricing is not only an important activity but frequently also a very important expense for industrial companies. In this short article we examine whether an improvement in measuring the return from pricing (pricing return on investment (ROI)) leads to an improvement in pricing capabilities and firm profits. The answer to this question is not trivial: performance measurement is costly and could, at least in theory, reduce...
In the first experiment, conducted at an imaging center on the Stanford University campus, each participant was given $40 of shopping money before viewing a series of 80 products and their prices on a screen inside the fMRI machine. "This made the shopping experience more real," Karmarkar says. To encourage purchasing, the products were offered at sub-retail prices. Sometimes participants saw the price first, and sometimes they saw the...
We consider a practical dynamic pricing problem with two substitutable products involving a number of business rules commonly seen in practice. Demand substitution exists between the two products (interproduct substitution) and may also exist across different time periods (intertemporal substitution). However, there is limited demand information such that the underlying probability distributions of the demand cannot be characterized...
More reasons why online mass merchandisers are category killersOne of the great pleasures for book lovers of all ages is the opportunity to settle into a comfortable armchair amid the stacks of an expertly curated bookstore and peruse the pages of possible purchases. It’s an old story already that those opportunities are disappearing as online mass merchandisers crowd out independent bookstores. The meticulously analyzed data in a...
Abstract Purpose: The purpose of this paper is to test the relationship between organizational antecedents, pricing capabilities, and firm performance. Design/methodology/approach:  Quantitative survey of 748 managers from mostly large companies globally. Findings: It was found that the following five key organizational resources (the 5 Cs) – center-led price management, organizational confidence, championing...
ABSTRACT A dynamic pricing scheme, also known as real-time pricing (RTP), can be more efficient and technically beneficial than the other price-based schemes (such as flat-rate or time-of-use pricing) for enabling demand response (DR) actions. Over the past few years, the advantages of RTP-based schemes have been extensively discussed for DR purposes in electricity markets; however, they have not been proven mathematically according to a...
Challenges of language analysis Online vendors have long struggled to figure out why the exact same product offered on different websites has varying sales figures. Previous research focused on online consumers’ reactions to product reviews and word-of-mouth recommendations. But product descriptions haven’t received as much attention because studying the effects of language on consumer habits is a difficult task, according...
Far too often we see organizations who say they want to improve their margins through better pricing, but their actions belie their statements.  Effective pricing does not occur by chance, and it does not result from following trite slogans.  Likewise, it is not an outcome of a one-time initiative from pricing consultants.  Effective pricing comes from a disciplined and strategic approach; one that can be learned.  You can...
If you aren’t sure, you’re not alone: For most of the items they buy, consumers don’t have an accurate sense of what the price should be. Consider the findings of a study led by Florida International University professor Peter R. Dickson and University of Florida professor Alan G. Sawyer in which researchers with clipboards stood in supermarket aisles pretending to be stock takers. Just as a shopper would place an item in a...
Importance  Prices for laboratory and other clinical services vary widely. Employers and insurers increasingly are adopting “reference pricing” policies to create incentives for patients to select lower-priced facilities. Objective  To measure the association between implementation of reference pricing and patient choice of laboratory, test prices, patient out-of-pocket spending, and insurer spending....
Well-managed companies already recognize the critical role pricing plays in driving performance. A foundation that underpins excellence in pricing is the key to realizing its potential. Over the past two decades, most companies have recognized the bottom-line impact to be gained through effective pricing. Yet awareness by itself is not enough. Tapping the full promise of pricing requires an infrastructure to drive real and sustained...