The role of perceived risk in pricing strategy for industrial products: A point-of-view perspective

Abstract

Purpose - The purpose of this research paper is to examine the role corporate and individual risk (from the point of view of the pricing manager) plays in developing pricing strategies. Design/methodology/approach - Managerial professionals in two graduate business programs were used to assess riskiness associated with pricing strategies. Grounded in attribution theory, t-tests were used to compare the different types of risk associated with the various pricing strategies. Findings - The findings suggest that pricing managers will view risk from different perspectives (i.e. corporate and individual) and that this "point of view" should have an impact on the pricing strategies selected. Research limitations/implications - Research limitations include the use of graduate students in lieu of actual pricing managers. However, this research is a first step in examining the different perspectives of risk that may be taken by managers. Practical implications - Pricing managers and organizations alike should be made aware of how a point-of-view perspective regarding risk can have a significant impact on selecting pricing strategies. The results of the study could provide guidance for corporations so that they can make sure pricing managers have the "correct" point of view regarding the riskiness of pricing strategies. Originality/value - The research is the first to identify and examine the different risk perspectives. This provides value for academic research because it is the first in the area of risk regarding the different perspectives.