Features of Strategic Value-Based Pricing in the Industrial Goods Market

Abstract

Value-based pricing is becoming more popular in modern B2B markets, although this approach is less common than cost-based and competition-based pricing. Even though, in recent decades, value-based pricing has been recognized by scientists as a better method compared to others in terms of generating profit, research is limited, for the most part, to the B2C market or is of a general descriptive nature. This article aims to study the essence, features, and advantages of a strategic value-based approach to pricing in the B2B market, as well as obstacles that hinder industrial enterprises' application of this method. The study is based on the conceptual principles of marketing pricing. To achieve the goal of the article and by the general logic of the study, several general scientific and special methods have been applied, in particular, comparison, abstraction, analysis and synthesis, generalization, and systematization.

As a result of the study, it was determined that value-based pricing is considered a modern and highly profitable method of price management in the scientific literature. However, the pace of its spread in practical pricing is not high, especially in the industrial goods market, where cost-based and competition-based pricing is preferred due to the relative ease of their application and a higher level of price justification for the enterprise. The analysis of empirical research allowed us to identify several barriers that prevent a more active implementation of value-based pricing in the B2B market.

It is concluded that value-based pricing is increasingly attracting the attention of researchers and the interest of practitioners and is a promising method of price management in the B2B market. The authors found that the value orientation in determining the price is inextricably linked to the strategic orientation of pricing decisions since it requires predicting the price level even before product development, which is directly related to the enterprise's long-term success in the market. When properly applied, this approach allows the enterprise to achieve the optimal combination of marketing and financial goals.