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Value creation character and value assessment responsibility

Author

Listed:
  • Magnus Johansson

    (Lund University)

  • Göran Olsson

    (Lund University)

  • Linn Andersson

    (Lund University)

Abstract

Value-based pricing is by many companies as well as in academia perceived as the preferred pricing model. The pricing literature includes a long-standing debate on pricing authority and centralized pricing authority can be associated with value-based pricing strategies. A critical success factor for value-based pricing is customer value assessment, and many companies have experienced challenges in implementing value assessment to support its value-based pricing. This paper outlines how centralized versus delegated value assessment responsibility depends on the organization’s value creation character and the variations in value in use for different customers within individual market segments. Based on the integration of literature on pricing and value configurations we propose a framework which we then exemplify by four illustrative cases for which data were gathered by semi-structured interviews. By considering the implications of value creation models on value assessment following our framework we contribute to the understanding of how value assessment responsibilities should be assigned for firms working with value-based pricing.

Suggested Citation

  • Magnus Johansson & Göran Olsson & Linn Andersson, 2017. "Value creation character and value assessment responsibility," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 56-75, February.
    • Handle: RePEc:pal:jorapm:v:16:y:2017:i:1:d:10.1057_s41272-016-0052-2
    DOI: 10.1057/s41272-016-0052-2
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    References listed on IDEAS

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    1. Lazear, Edward P., 2015. "The impatient salesperson and the delegation of pricing authority," Research in Economics, Elsevier, vol. 69(1), pages 63-74.
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    4. Johansson, Magnus & Jonsson, Anna, 2012. "The package logic: A study on value creation and knowledge flows," European Management Journal, Elsevier, vol. 30(6), pages 535-551.
    5. Shantanu Dutta & Mark J. Zbaracki & Mark Bergen, 2003. "Pricing process as a capability: a resource‐based perspective," Strategic Management Journal, Wiley Blackwell, vol. 24(7), pages 615-630, July.
    6. Rajiv Lal, 1986. "Technical Note—Delegating Pricing Responsibility to the Salesforce," Marketing Science, INFORMS, vol. 5(2), pages 159-168.
    7. Frenzen, Heiko & Hansen, Ann-Kristin & Krafft, Manfred & Mantrala, Murali K. & Schmidt, Simone, 2010. "Delegation of pricing authority to the sales force: An agency-theoretic perspective of its determinants and impact on performance," International Journal of Research in Marketing, Elsevier, vol. 27(1), pages 58-68.
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    Cited by:

    1. Birutė Mikulskienė & Julija Moskvina, 2020. "Peculiar properties of the pricing process in customized furniture manufacturing enterprises," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(6), pages 411-420, December.

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    Keywords

    value; assessment; pricing; creation; B2B; segment;
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