Pricing strategies for new business-to-business products

The purpose of this paper is to investigate the conditions that lead to the adoption of the three new business-to-business (B2B) pricing strategies, namely, skimming pricing (i.e., a high initial price), penetration pricing... [ view full abstract ]

The purpose of this paper is to investigate the conditions that lead to the adoption of the three new business-to-business (B2B) pricing strategies, namely, skimming pricing (i.e., a high initial price), penetration pricing (i.e., a low initial price) and pricing similar to competitive prices. In order to achieve the study’s research objectives, data were collected through a mail survey from 167 B2B companies. Moreover, 20 in-depth personal interviews were conducted in the initial phase of the research. Analyzing data from five business-to-business sectors, the study concludes that skimming pricing and penetration pricing relate to the company’s corporate and marketing strategy and the service characteristics, while market conditions influence the adoption of pricing similar to competitive prices. The above findings reflect the complexity and multidimensionality of new product pricing. Thus, a single mode for pricing decisions does not seem to exist. However, given the limited number of the sectors investigated in the current study, the research results may not be easily applicable to other B2B contexts.