Plaiting pricing into product categories and corporate objectives
| Pages | 67-76 |
| DOI | https://doi.org/10.1108/10610420910933380 |
| Date | 27 February 2009 |
| Published date | 27 February 2009 |
| Author | John Kehagias,Emmanuel Skourtis,Aikaterini Vassilikopoulou |
| Subject Matter | Marketing |
Pricing strategy & practice
Plaiting pricing into product categories and
corporate objectives
John Kehagias and Emmanuel Skourtis
Hellenic Open University, Attika, Greece, and
Aikaterini Vassilikopoulou
Athens University of Economics and Business, Athens, Greece
Abstract
Purpose – Using the product classification proposed by the Commodity School as it was originally expressed and later developed, this research aims to
focus on defining pricing strategies for specific corporate objectives, that is, profit increase, market share increase,and prevention of new competitors
from entering the market.
Design/methodology/approach – In order to investigate the relationship between four consumer product categories and alternative pricing
strategies in light of various corporate objectives, a set of research questions and propositions was formed and tested on the basis of data reflecting
opinions expressed by marketing executives through a mailed survey in Greece.
Findings – For convenience and preference products, the low-price strategy is used more often, irrespective of corporate objectives, whereas the high-
price strategy is used more often, irrespective of corporate objectives, for specialty products. For shopping products,the low-price strategy is used more
often when the main corporate objectives are increased market share and the prevention of new competitors from entering the market, but when the
main corporate objective is increased profits, the high-price strategy tends to prevail.
Research limitations/implications – The current research could be further expanded to cover other related topics such as the pricing policies and
specific pricing methods that are used in the four product categories in combination with the pricing strategies they relate to and serve.
Practical implications – For marketers, the development of the proposed framework can serve as a basis for pricing decisions, provided, of course,
that they use research-based information about the extent to which their products have the attributes of a certain product category.
Originality/value – As the literature review revealed, no conceptual links have been made between the three important parameters examined, that is,
product categories, corporate objectives, and pricing strategies, that can form a pricing framework for consumer products. This research serves as a
starting point for developing such a three-point framework.
Keywords Product specification, Pricing policy, Strategic objectives, Greece
Paper type Research paper
Introduction
From Copeland’s first attempt in 1923 to date, researchers
have dealt extensively with classifying products in various
categories. In 1986 Murphy and Enis for the first time
suggested a pricing strategy for four product categories
(convenience, preference, shopping, and specialty). Based on
relevant literature, this research aims to provide a strategic
pricing framework that wi ll propose a pricing stra tegy
(skimming or penetration strategy) for the different product
categories in relation to specific corporate objectives (profit
increase, market share increase, and prevention of new
competitors from entering the market). Skimming and
penetration strategy were selected instead of other strategies
because the relevant literature considers them to be the most
fundamental (e.g., Dean, 1976; McCarthy and Perreault,
1993; Rowley, 1997). In order to examine the relationship
between pricing strategies, product categories, and corporate
objectives, the paper’s methodological approach relies on a
survey of expert opinions expressed by marketing executives
handling consumer products in Greece.
Literature review
Over the years, many classification systems for consumer
goods have been proposed. The first attempt at product
classification appeared relatively early (in 1912) (Gardner,
1945) and led to the development of various classification
schemes. In this context, one could consider C. Parlin the
founder of the “Commodity School”. As far as back 1912,
Parlin proposed three product categories: convenience goods,
emergency goods, and shopping goods (Gardner, 1945,
p. 275-276). However, his research study lacked
generalisation, as it was limited to “women’s purchases”.
Copeland (1923, p. 282-298) was the first to suggest a general
classification of products into convenience, shopping, and
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
18/1 (2009) 67–76
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420910933380]
67
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