The Value-Based Pricing Determination Matrix for Pricing Method Selection

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F21%3A43919308" target="_blank" >RIV/62156489:43110/21:43919308 - isvavai.cz</a>

Result on the web

<a href="http://dx.doi.org/10.18267/j.cebr.267" target="_blank" >http://dx.doi.org/10.18267/j.cebr.267</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18267/j.cebr.267" target="_blank" >10.18267/j.cebr.267</a>

Result language

angličtina

Original language name

The Value-Based Pricing Determination Matrix for Pricing Method Selection

Original language description

Several researchers suggest that value-based pricing (VBP) is one of the most profitable pricing methods for companies competing in today&apos;s business environment. Interestingly, the implementation rates of VBP are, however, rather low. Numerous barriers to the implementation of value-based pricing have been found by researchers already. Although, a theoretical model for determining whether value-based pricing may be a suitable pricing method for a business is yet to be found in the literature. This study aims to introduce a theoretical model to aid pricing executives in their pricing method selection. For this purpose, 20 semi-structured in-depth expert interviews with German pricing experts were conducted as part of qualitative data analysis. The experts were selected using a purposive selection method. Pricing experts were asked to describe the most important factors for determining whether a company may implement value-based pricing. We identified two main factors as being necessities for using VBP. The first factor named by the authors was the brand advantage (BA), and the second factor was represented by the delivered product benefits (DB) as perceived by the customer. Based on these two factors, a two-dimensional, quadrant-based theoretical model was developed and was named the VBP Determination Matrix. The matrix now evaluates a company&apos;s position within the matrix based on the factors BA and DB. It leads to direct calls-to-action for properly choosing the most suitable pricing method. This study&apos;s theoretical contribution was the development of a so far non-existing two-dimensional model for the determination of the suitability of value-based pricing. Business practitioners are now provided with an easy-to-use and highly applicable model to determine the initial suitability of implementing VBP. Senior management is given direct calls-to-action, whether an investment to implement VBP shall be made and whether to allocate resources. Implications for Central European audience: The VBP Determination Matrix is a highly applicable model recommended especially for business practitioners in pricing, marketing and management. Central European companies are recommended to utilise the model to benefit from its strategic recommendations to properly select the most suitable pricing method for profit maximisation and competitiveness optimisation.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Central European Business Review

ISSN

1805-4862

e-ISSN

—

Volume of the periodical

10

Issue of the periodical within the volume

4

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

25

Pages from-to

99-123

UT code for WoS article

000698625900005

EID of the result in the Scopus database

2-s2.0-85115768848