The current literature is largely silent on how executives interpret the concept of value-based pricing. Although only a minority of companies adopts value-based pricing approaches, little is known about antecedents of alternative pricing approaches. We suggest this may be because of the fact that few professionals possess an understanding of value-based pricing, which is both academically rigorous as well as practically relevant. Our interviews with 44 executives in 15 US industrial firms show that those practicing value-based pricing interpret customer value in ways fully consistent with the current academic literature. Those practicing cost- or competition-based pricing, however, show a poor understanding of value-based pricing, which may explain why their companies practice cost- or competition-based approaches.
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Liozu, S., Hinterhuber, A., Boland, R. et al. The conceptualization of value-based pricing in industrial firms. J Revenue Pricing Manag 11, 12–34 (2012). https://doi.org/10.1057/rpm.2011.34
- industrial firms
- value-based pricing
- managerial cognition