IDEAS home Printed from https://ideas.repec.org/a/pal/jorapm/v20y2021i4d10.1057_s41272-021-00303-4.html
   My bibliography  Save this article

The adoption of pricing from an organizational perspective and its impact on relative firm performance

Author

Listed:
  • Stephan M. Liozu

    (Case Western Reserve University)

Abstract

Over the past decade, more firms are adopting best practices, methods, and systems related to pricing. There is increasing evidence of pricing as a powerful lever and driver of financial performance. Despite this good progress, pricing as a function lags behind other functions, and many firms struggles to improve the adoption of pricing tools, methods, and systems. We survey 540 business and pricing professionals with the support of the Professional Pricing Society to investigate the influence of four organizational factors on the adoption of pricing as well as the impact of increased pricing adoption to relative firm performance. Our results highlight the positive influence of organizational alignment, cross-functional collaboration, and top championing support on the adoption of pricing. They also reveal that too much formalization in the pricing process negatively influences adoption. Finally, we find that the greater the adoption of pricing, the greater the relative firm performance.

Suggested Citation

  • Stephan M. Liozu, 2021. "The adoption of pricing from an organizational perspective and its impact on relative firm performance," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 390-402, August.
    • Handle: RePEc:pal:jorapm:v:20:y:2021:i:4:d:10.1057_s41272-021-00303-4
    DOI: 10.1057/s41272-021-00303-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41272-021-00303-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41272-021-00303-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephan M. Liozu, 2018. "Designing salesforce compensation programs to improve pricing execution," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(1), pages 11-19, February.
    2. Paul Ingenbleek & Marion Debruyne & Ruud T. Frambach & Theo M. M. Verhallen, 2003. "Successful New Product Pricing Practices: A Contingency Approach," Marketing Letters, Springer, vol. 14(4), pages 289-305, December.
    3. Todd Snelgrove, 2018. "Quantified value first, then price: realizing the positive impact of a value pricing strategy," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(1), pages 41-44, February.
    4. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    5. Dutta, Shantanu & Bergen, Mark & Levy, Daniel & Ritson, Mark & Zbaracki, Mark, 2002. "Pricing as a Strategic Capability," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 43(3 (April ), pages 61-66.
    6. Stephan M. Liozu, 2019. "Penetration of the pricing function among global Fortune 500 firms," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(6), pages 421-428, December.
    7. Neil A. Morgan & Douglas W. Vorhies & Charlotte H. Mason, 2009. "Market orientation, marketing capabilities, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 909-920, August.
    8. Wouters, Marc & Anderson, James C. & Wynstra, Finn, 2005. "The adoption of total cost of ownership for sourcing decisions--a structural equations analysis," Accounting, Organizations and Society, Elsevier, vol. 30(2), pages 167-191, February.
    9. Zeki Simsek, 2007. "CEO tenure and organizational performance: an intervening model," Strategic Management Journal, Wiley Blackwell, vol. 28(6), pages 653-662, June.
    10. MacKenzie, Scott B. & Podsakoff, Philip M., 2012. "Common Method Bias in Marketing: Causes, Mechanisms, and Procedural Remedies," Journal of Retailing, Elsevier, vol. 88(4), pages 542-555.
    11. Michael Song & Cornelia Droge & Sangphet Hanvanich & Roger Calantone, 2005. "Marketing and technology resource complementarity: an analysis of their interaction effect in two environmental contexts," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 259-276, March.
    12. Raja, Jawwad Z. & Frandsen, Thomas & Kowalkowski, Christian & Jarmatz, Martin, 2020. "Learning to discover value: Value-based pricing and selling capabilities for services and solutions," Journal of Business Research, Elsevier, vol. 114(C), pages 142-159.
    13. Ruth N. Bolton, 1993. "Pretesting Questionnaires: Content Analyses of Respondents' Concurrent Verbal Protocols," Marketing Science, INFORMS, vol. 12(3), pages 280-303.
    14. Howell, Jane M. & Shea, Christine M. & Higgins, Christopher A., 2005. "Champions of product innovations: defining, developing, and validating a measure of champion behavior," Journal of Business Venturing, Elsevier, vol. 20(5), pages 641-661, September.
    15. Töytäri, Pekka & Keränen, Joona & Rajala, Risto, 2017. "Barriers to implementing value-based pricing in industrial markets: A micro-foundations perspective," Journal of Business Research, Elsevier, vol. 76(C), pages 237-246.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Romina Gómez-Prado & Aldo Alvarez-Risco & Berdy Briggitte Cuya-Velásquez & Marián Arias-Meza & Nilda Campos-Dávalos & Luis Juarez-Rojas & Maria de las Mercedes Anderson-Seminario & Shyla Del-Aguila-Ar, 2022. "Product Innovation, Market Intelligence and Pricing Capability as a Competitive Advantage in the International Performance of Startups: Case of Peru," Sustainability, MDPI, vol. 14(17), pages 1-21, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephan M. Liozu & Sven Feurer & Andreas Hinterhuber & Arch Woodside, 2021. "Configurational theory and practices of firms employing multiple pricing policies: assessing effective and ineffective pricing recipes in multiple firm contexts," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 420-435, August.
    2. Hinterhuber, Andreas, 2017. "Value quantification capabilities in industrial markets," Journal of Business Research, Elsevier, vol. 76(C), pages 163-178.
    3. Van Wijk, Raymond & Nadolska, Anna, 2020. "Making more of alliance portfolios: The role of alliance portfolio coordination," European Management Journal, Elsevier, vol. 38(3), pages 388-399.
    4. Ting Chi & Olabisi Adesanya & Hang Liu & Rebecca Anderson & Zihui Zhao, 2023. "Renting than Buying Apparel: U.S. Consumer Collaborative Consumption for Sustainability," Sustainability, MDPI, vol. 15(6), pages 1-16, March.
    5. Henri Kuokkanen & Jean-Pierre Van der Rest, 2022. "Game—Gimme a Better Price! A Negotiation Role Play on B2B Pricing in Hotel Revenue Management," INFORMS Transactions on Education, INFORMS, vol. 23(1), pages 46-55, September.
    6. Sora Lee & Jaewon Yoo, 2021. "Determinants of a Firm’s Sustainable Competitive Advantages: Focused on Korean Small Enterprises," Sustainability, MDPI, vol. 13(1), pages 1-16, January.
    7. Sok, Phyra & O’Cass, Aron & Sok, Keo Mony, 2013. "Achieving superior SME performance: Overarching role of marketing, innovation, and learning capabilities," Australasian marketing journal, Elsevier, vol. 21(3), pages 161-167.
    8. Hinterhuber, Andreas & Kienzler, Mario & Liozu, Stephan, 2021. "New product pricing in business markets: The role of psychological traits," Journal of Business Research, Elsevier, vol. 133(C), pages 231-241.
    9. Liu, Yi & Liao, Yonghai & Li, Yuan, 2018. "Capability configuration, ambidexterity and performance: Evidence from service outsourcing sector," International Journal of Production Economics, Elsevier, vol. 200(C), pages 343-352.
    10. Don Jyh-Fu Jeng & Artur Pak, 2016. "The variable effects of dynamic capability by firm size: the interaction of innovation and marketing capabilities in competitive industries," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 115-130, March.
    11. Malte Brettel & Andreas Engelen & Florian Heinemann, 2009. "New entrepreneurial ventures in a globalized world: The role of market orientation," Journal of International Entrepreneurship, Springer, vol. 7(2), pages 88-110, June.
    12. Pinho, José Carlos & Prange, Christiane, 2016. "The effect of social networks and dynamic internationalization capabilities on international performance," Journal of World Business, Elsevier, vol. 51(3), pages 391-403.
    13. Alexander Leischnig & Björn S. Ivens & Nadine Kammerlander, 2017. "A new conceptual lens for marketing: a configurational perspective based on the business model concept," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 138-153, December.
    14. Stephan M. Liozu, 2017. "State of value-based-pricing survey: Perceptions, challenges, and impact," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 18-29, February.
    15. Sang-Uk Jung & Valeriia Shegai, 2023. "The Impact of Digital Marketing Innovation on Firm Performance: Mediation by Marketing Capability and Moderation by Firm Size," Sustainability, MDPI, vol. 15(7), pages 1-16, March.
    16. Cristina Fernandes & João J. Ferreira & Mário L. Raposo & Cristina Estevão & Marta Peris-Ortiz & Carlos Rueda-Armengot, 2017. "The dynamic capabilities perspective of strategic management: a co-citation analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 112(1), pages 529-555, July.
    17. Liu, Jiawen & Gong, Yeming (Yale) & Zhu, Joe & Zhang, Jinlong, 2018. "A DEA-based approach for competitive environment analysis in global operations strategies," International Journal of Production Economics, Elsevier, vol. 203(C), pages 110-123.
    18. Wu, Jie, 2013. "Marketing capabilities, institutional development, and the performance of emerging market firms: A multinational study," International Journal of Research in Marketing, Elsevier, vol. 30(1), pages 36-45.
    19. Theo Benos & Nikos Kalogeras & Frans J.H.M. Verhees & Panagiota Sergaki & Joost M.E. Pennings, 2016. "Cooperatives’ Organizational Restructuring, Strategic Attributes, and Performance: The Case of Agribusiness Cooperatives in Greece," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 127-150, January.
    20. Stephan M Liozu, 2016. "The evolution and future of pricing capabilities," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 15(3), pages 306-316, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorapm:v:20:y:2021:i:4:d:10.1057_s41272-021-00303-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.