Abstract
The distinction between price strategies and pricing practices is fundamental in the realm of pricing decisions. Although often used interchangeably, these terms encapsulate different concepts that profoundly impact managerial decisions and organizational outcomes. Price strategies, observable in the marketplace, serve as the means by which firms achieve their pricing objectives. In contrast, pricing practices, hidden from external observers, encompass the activities undertaken by managers in arriving at price decisions. This entry delineates the evolution of these concepts, highlighting their divergent origins and pivotal roles within pricing literature. It underscores how normative pricing models once dominated the field, offering strategic advice rooted in economics. Conversely, pricing practices emerge from a behavioral perspective, acknowledging the complexity managers face and their tendency to engage in simplifying practices within organizational processes. The entry also emphasizes the significance of linking pricing practices with the resource-based view, illustrating pricing as an organizational competence. Moreover, it dissects notable pricing strategies and their determinants, detailing their visibility in the market. Additionally, it explores distinct pricing practices, notably value-, competition-, and cost-informed approaches, emphasizing their impact on managerial decision-making and organizational performance. The entry concludes by elucidating the interconnectedness of price strategies and pricing practices and their pivotal role in managerial decision making and organizational success.
Original language | English |
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Title of host publication | Elgar Encyclopedia of Pricing |
Publisher | Edward Elgar |
Pages | 207-209 |
ISBN (Electronic) | 9781035307319 |
ISBN (Print) | 9781035307302 |
DOIs | |
Publication status | Published - 9 Jul 2024 |
Keywords
- Behavioral theory
- Market visibility
- Normative pricing models
- Price strategies
- Pricing practices
- Resource-based view