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, pricing scholars have demonstrated the need to pay greater attention toward pricing capabilities to increase competitive advantage and firm performance. This article examines the evolution of the concept of pricing capabilities over time, the current state of pricing capabilities theory and the future ahead for this emerging field.
Most scholars and consultants agree that pricing is a highly complex function (Lancioni et al, 2005; Liozu, 2012). Its complexity might come from organizational demands to deploy pricing innovations (Liozu et al, 2014), from the interfunctional collaboration required to get teams to work together (Lancioni et al, 2005) or from the lack of formal adoption of changemanagement practices to support the deployment of progressive pricing practices, leading to irrational pricing decisions (Liozu, 2013a). Whatever the reason, many leaders still give up and consider pricing a managerial headache (Dolan, 1995). Many firms launching pricing programs are also stuck in the zone of good intentions, wondering how they can better manage pricing complexity (Hinterhuber and Liozu, 2012) to improve profitability.
Recent research shows that attention to pricing increases yearly. Pricing, marketing and management scholars have begun to investigate the technical and social dynamics of pricing, generating a series of papers directly related to pricing capabilities. This focus began with the seminal work of Dutta et al (2003), which established a strong base for additional research and a starting point for an emerging theory in the field of pricing capabilities.
This article traces the evolution of pricing capabilities since the late 1990s. We discuss the theoretical roots of this concept and the current emerging research trends, and we propose areas of future research to advance the theoretical field.
Read complete paper here: