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Shattering the Myth of Costless Price Changes: Emerging Perspectives on Dynamic Pricing

  • Mark Bergen

    (University of Minnesota)

  • Mark Ritson

    (London Business School)

  • Shantanu Dutta

    (University of Sourthern California)

  • Daniel Levy

    (Bar-Ilan University)

  • Mark Zbaracki

    (University of Pennsylvania)

In this paper we argue that pricing is all about price changes, and that the costs of price changes are often simultaneously subtle and substantial. We discuss a framework to deal with the dynamics of changing prices. This framework incorporates customer interpretations of price changes, an awareness of the organizational costs of price changes, investments in future pricing processes, and an understanding of the role that supply chains play in price change strategy. The framework can be used at the tactical level to improve the specific price changes chosen and made, at the managerial level to decide whether or not to make a particular price change at all, and at the strategic level to determine what price adjustment processes should be invested in to improve pricing effectiveness in the future.

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File URL: http://econwpa.repec.org/eps/othr/papers/0505/0505006.pdf
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Paper provided by EconWPA in its series Others with number 0505006.

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Length: 22 pages
Date of creation: 12 May 2005
Date of revision:
Handle: RePEc:wpa:wuwpot:0505006
Note: Type of Document - pdf; pages: 22
Contact details of provider: Web page: http://econwpa.repec.org

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