Pricing objectives and pricing methods in the services sector

Pricing objectives and pricing methods in the services sector Purpose – The purpose of this research paper is to explore the pricing objectives that service companies pursue along with the pricing methods that they adopt in order to set their prices. Design/methodology/approach – An extensive review of the literature revealed the complete lack of any previous work aiming to investigate the potential association between these two important elements of a company's pricing strategy. Thus, the value of the paper lies in the fact that it presents the first attempt to examine this issue empirically. In order to achieve the research objectives, data were collected from 170 companies operating in six different services sectors in Greece through personal interviews. Findings – The findings of the study reveal that the objectives, which are pursued, are fundamentally qualitative rather than quantitative in their nature with a particular emphasis given on the companies’ customers. However, the pricing methods, which are adopted by the majority of the companies, refer to the traditional cost‐plus method and the pricing according to the market's average prices. The study also revealed that the pricing objectives are, as should be expected, associated with the pricing methods. Practical implications – The practical implications of the findings refer to the fact that managers might gain a lot by placing their emphasis on an integrated pricing approach and implement pricing methods that are in line with the pricing objectives that have been initially set. However, the context of the study (Greece) is an obvious limitation to the ability to generalize these findings, suggesting the need for future research that replicates the current study in other countries. Originality/value – Managers might gain a lot by placing their emphasis on an integrated pricing approach and implement pricing methods that are in line with the pricing objectives that have been initially set. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Services Marketing Emerald Publishing

Pricing objectives and pricing methods in the services sector

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Publisher
Emerald Publishing
Copyright
Copyright © 2005 Emerald Group Publishing Limited. All rights reserved.
ISSN
0887-6045
DOI
10.1108/08876040510579398
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this research paper is to explore the pricing objectives that service companies pursue along with the pricing methods that they adopt in order to set their prices. Design/methodology/approach – An extensive review of the literature revealed the complete lack of any previous work aiming to investigate the potential association between these two important elements of a company's pricing strategy. Thus, the value of the paper lies in the fact that it presents the first attempt to examine this issue empirically. In order to achieve the research objectives, data were collected from 170 companies operating in six different services sectors in Greece through personal interviews. Findings – The findings of the study reveal that the objectives, which are pursued, are fundamentally qualitative rather than quantitative in their nature with a particular emphasis given on the companies’ customers. However, the pricing methods, which are adopted by the majority of the companies, refer to the traditional cost‐plus method and the pricing according to the market's average prices. The study also revealed that the pricing objectives are, as should be expected, associated with the pricing methods. Practical implications – The practical implications of the findings refer to the fact that managers might gain a lot by placing their emphasis on an integrated pricing approach and implement pricing methods that are in line with the pricing objectives that have been initially set. However, the context of the study (Greece) is an obvious limitation to the ability to generalize these findings, suggesting the need for future research that replicates the current study in other countries. Originality/value – Managers might gain a lot by placing their emphasis on an integrated pricing approach and implement pricing methods that are in line with the pricing objectives that have been initially set.

Journal

Journal of Services MarketingEmerald Publishing

Published: Jan 1, 2005

Keywords: Service industries; Pricing policy; Greece

References

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