The relationship between customer value and pricing strategies: an empirical test
| DOI | https://doi.org/10.1108/10610421211276321 |
| Pages | 538-546 |
| Published date | 26 October 2012 |
| Date | 26 October 2012 |
| Author | Anna Codini,Nicola Saccani,Alessandro Sicco |
| Subject Matter | Marketing |
Pricing strategy & practice
The relationship between customer value and
pricing strategies: an empirical test
Anna Codini
University of Brescia, Brescia, Italy, and
Nicola Saccani and Alessandro Sicco
Department of Industrial and Mechanical Engineering, Supply Chain and Service Management Research Centre,
University of Brescia, Brescia, Italy
Abstract
Purpose – The paper seeks to fill a research gap that concerns empirical studies on value-based pricing in durable consumer goods. It aims to analyse
the relationship between value for the customer and market prices in the washing machines market.
Design/methodology/approach – The customer value of a sample of 129 washing machine models is assessed through the conjoint analysis
technique. It is then compared through a regression analysis to the market prices of the products.
Findings – The regression analysis reveals that the alignment between price and value for the customer is limited (only one of the two subsamples
presents a positive dependence among the variables).
Research limitations/implications – The study lacks explanatory power about the reasons for the misalignment between price and customer value
in the investigated sector.The results, moreover, refer to a specific product category and a specific national market, although their representativeness as
a mature durable in a mature market suggests a broader relevance of the implications. The size of the samples of the empirical research is also limited.
Practical implications – The paper provides an example and guidelines to practitioners on how to implement a customer value assessment. It
provides practitioners a deeper understanding of the consequences of misaligned pricing, and of the potential of understanding the actual value
sources for the customers.
Originality/value – The study empirically assesses the relationship betweenvalue for the customer andmarket prices of a category ofmature durable
goods. The results support the claim that value-based pricing, although believed to be superior to other pricing policies, is still not established asa
prominent practice. Moreover, the findings contribute to the discussion on the value of environment-related attributes and their lifecycle monetary
impact on the customers. It also identifies another possible obstacle to the adoption of value-based pricing, i.e.the structure of the market, to be added
to the ones reviewed in the literature.
Keywords Pricing, Value for the customer, Conjoint analysis, Durable consumer goods, Washing machines, Regression analysis, Pricing,
Electrical goods, Italy
Paper type Research paper
1. Introduction
Recent studies (Hinterhuber, 2008) report of successful
adoption of value based-pricing strategies in diverse
businesses such as pharmaceutical, information technology,
wireless internet service provision, airlines, automotive and
biotech. However, although the benefits of value-bas ed
pricing have been widely acknowledged (Monroe, 2003), its
application seems to be limited yet, due to practical obstacles,
the main being the actual value assessment of products for the
customer (Ingenbleek, 2007; Hinterhuber, 2008).
This paper aims to contribute in filling a gap concerning
empirical studies on value-based pricing in durable consumer
goods. An analysis is carried out on the relationship between
value for the customer and market prices in the washing
machines market.
The study is based on the application of the conjoint
analysis methodology to assess the importance of different
washing machine attributes. The results allow to assign a
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
21/7 (2012) 538–546
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610421211276321]
This paper has been inspired by the activity of the ASAP Service
Management Forum, an Italian-based community where scholars and
practitioners from five Italian universities, and more than 50 leading
manufacturing companies and service providers collaborate in developing
research and dissemination in the product-services management field. For
more information see www.asapsmf.org/
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