Abstract

http://ssrn.com/abstract=389603
 
 

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Pricing as a Strategic Capability


Shantanu Dutta


University of Southern California - Marshall School of Business

Mark E. Bergen


University of Minnesota - Carlson School of Management

Daniel Levy


Bar-Ilan University - Department of Economics; Emory University - Department of Economics; Rimini Center for Economic Analysis

Mark Ritson


London Business School

Mark Zbaracki


University of Western Ontario - General Management Area Group


MIT Sloan Management Review, Vol. 43, No. 3, pp. 61-66, Spring 2002

Abstract:     
For too long, most people who run companies have made a variety of unwarranted but detrimental assumptions about pricing. Changing prices, for example, has been looked upon as an easy, quick and reversible process, and new technologies have only reinforced that way of thinking. Similarly, extracting value from a product by pricing it correctly has been seen as relatively uncomplicated; the hard part is creating the valuable product in the first place. But these dismissive attitudes toward pricing miss the mark. Pricing is complex, and it's only growing more so as new tools and techniques become available. The ability to set the right price at the right time, any time - the very definition of a pricing capability - is also becoming increasingly important. In fact, in the course of working with dozens of companies in the past couple of years, we have spoken with several executives who believe that developing a pricing capability is essential to their business's survival. And they are backing up their views by investing in three areas: Human capital, systems capital and social capital. We explain the nature of these investments and how they come together to form a pricing capability that competitors will have a hard time imitating. We don't mean to say that building such a capability is a simple task accomplished by committing a few resources to it. It requires an effort that some companies may not be in a position to undertake. Those that do take a comprehensive approach, however, will be able to make superior pricing decisions that fit with their positioning, with their customers, with their suppliers and with evolving market conditions for years to come.

JEL Classification: M30, M10, M20, L11, L16, E31

Accepted Paper Series





Not Available For Download

Date posted: April 21, 2003  

Suggested Citation

Dutta, Shantanu and Bergen, Mark E. and Levy, Daniel and Ritson, Mark and Zbaracki, Mark, Pricing as a Strategic Capability. MIT Sloan Management Review, Vol. 43, No. 3, pp. 61-66, Spring 2002. Available at SSRN: http://ssrn.com/abstract=389603

Contact Information

Shantanu Dutta
University of Southern California - Marshall School of Business ( email )
Hoffman Hall 701
Los Angeles, CA 90089-1427
United States
213-740-5038 (Phone)
213-740-7828 (Fax)
Mark E. Bergen (Contact Author)
University of Minnesota - Carlson School of Management ( email )
19th Avenue South
Minneapolis, MN 55455
United States
612-624-1821 (Phone)
Daniel Levy
Bar-Ilan University - Department of Economics ( email )
Ramat-Gan, 5290002
Israel
+972 3 531-8345 (Phone)
+972 3 738-4034 (Fax)
HOME PAGE: http://econ.biu.ac.il/en/levy

Emory University - Department of Economics ( email )
1602 Fishburne Drive, Suite 306
Rich Building
Atlanta, GA 30322-0001
United States
HOME PAGE: http://economics.emory.edu/home/people/faculty/Levydaniel.html
Rimini Center for Economic Analysis ( email )
Via Patara, 3
Rimini (RN), RN 47900
Italy
HOME PAGE: http://www.rcfea.org/
Mark Ritson
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
Mark Zbaracki
University of Western Ontario - General Management Area Group ( email )
London, Ontario
Canada
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