Response to the Comments on "Industrial Pricing: Theory and Managerial Practice"

Noble, Peter M.; Gruca, Thomas S.
September 1999
Marketing Science;1999, Vol. 18 Issue 3, p458
Academic Journal
The article presents a response to the comments on the paper "Industrial Pricing: Theory and Managerial Practice," by Peter M. Noble and Thomas S. Gruca. The study had its origins in the thesis of the first author, who entered a doctoral program in marketing after spending 18 years in the heavy equipment industry. During that time, Noble spent a lot of time setting prices and trying to predict future price changes by competitors. His industry experience suggested that the market-oriented pricing strategies discussed in the marketing literature are not used as extensively in practice as researchers might like to believe. While the overall use of cost-based pricing in this study seems high, these results should be viewed in the context of the industries examined. Capital goods industries are characterized by high unit costs as well as substantial fixed investments. In such an industry, the importance of the so-called "floor" of the pricing window of opportunity is understandable. Another criticism of the study is the lack of the tools of segmentation, targeting, and positioning, which lead to a value-based marketing strategy. However, these steps in the marketing process are actually inherent in the definitions of the determinants of the pricing strategies.


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