Spann, Martin ORCID: 0000-0003-4645-3913, Fischer, Marc and Tellis, Gerard J. (2015). Skimming or Penetration? Strategic Dynamic Pricing for New Products. Mark. Sci., 34 (2). S. 235 - 250. CATONSVILLE: INFORMS. ISSN 1526-548X

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Abstract

Current complex dynamic markets are characterized by numerous brands, each with multiple products and price points, and differentiated on a variety of product attributes plus a large number of new product introductions. This study seeks to analyze dynamic pricing paths in a highly complex branded market, consisting of 663 products under 79 brand names of digital cameras. The authors develop a method to classify dynamic pricing strategies and analyze the choice and correlates of observed pricing paths in the introduction and early growth phase of this market. The authors find that, despite numerous recommendations in the literature for skimming or penetration pricing, market pricing dominates in practice. In particular, the authors find five patterns: skimming (20% frequency), penetration (20% frequency), and three variants of market-pricing patterns (60% frequency), where new products are launched at market prices. Skimming pricing launches the new product 16% above the market price and subsequently increases the price relative to the market price. Penetration pricing launches the new product 18% below the market price and subsequently lowers the price relative to the market price. Firms exhibit a mix of these pricing paths across their portfolios. The specific pricing paths correlate with market, firm, and brand characteristics such as competitive intensity, market pioneering, brand reputation, and experience effects. The authors discuss managerial implications.

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Spann, MartinUNSPECIFIEDorcid.org/0000-0003-4645-3913UNSPECIFIED
Fischer, MarcUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Tellis, Gerard J.UNSPECIFIEDUNSPECIFIEDUNSPECIFIED
URN: urn:nbn:de:hbz:38-405863
DOI: 10.1287/mksc.2014.0891
Journal or Publication Title: Mark. Sci.
Volume: 34
Number: 2
Page Range: S. 235 - 250
Date: 2015
Publisher: INFORMS
Place of Publication: CATONSVILLE
ISSN: 1526-548X
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: no entry
Uncontrolled Keywords:
KeywordsLanguage
MARKET SHARE; CONSUMER DURABLES; COMPETITION; ELASTICITY; ENTRY; ORDER; MODELMultiple languages
BusinessMultiple languages
URI: http://kups.ub.uni-koeln.de/id/eprint/40586

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