Strategic Pricing Decisions as Cornerstones for Successful Marketing Management: An Empirical Study on Technology-Based SMEs

Abstract

Corey (1962) and Lynn (1967) state that all marketing, and thus, much business management focuses on pricing decisions. Strategic pricing is not about setting a price but about translating the broad objectives of a firm into market reality, establishing pricing competence, targeting markets, and managing pricing processes and systems (Lynn 1967; Nagle and Holden 2002; Rao 1984). In particular, new product and service pricing has become increasingly important (Henard and Szymanski 2001). Nevertheless, marketing activities of SMEs are still mostly informal, follow a short-term orientation, and lack strategic content (Bhide 1996; Coviello and Brodie 2000). This is particularly critical, because the scarcity of financial and personnel resources restricts the range and intensity of marketing activities an SME is able to pursue (Weinrauch et al. 1991). But so far, academic scholars have examined mostly large manufacturing firms with a few exceptions focusing on SMEs, usually with a case study approach applying descriptive statistics (e.g., Curran et al. 1997).