Missing price-related information - an assessment of pricing practices in B2B context

Literature on pricing has proposed pricing processes of a normative nature. With these representations implicitly come necessary and sufficient sets of information for pricing decisions. However, they seem to be a misfit with realities in B2B business. Firstly, the concepts partly miss B2B distinctive elements, such as price negotiations and close long-term customer relationship management. Secondly, pricing competences are often spread across functions and roles within the company. This renders pricing a companywide task and makes a fully integrated pricing process difficult. This research-practice gap has been established in pricing literature. In order to contribute to the understanding of B2B-pricing practice and to further close the research-practice-gap, we aim to identify and describe pricing managers‘ deviations from normative pricing processes. We found that price-related information deficits might cause strong deviations from normative pricing processes. This paper analyses pricing managers’ compensation mechanisms, in cases of price-related information deficits. Furthermore, we aim to identify which complementary or substitutional information pricing managers target instead. We approached this explorative research subject with a qualitative method and analyzed it with Grounded Theory. The interviewees are seventeen pricing managers from various industrial sectors, who all operate on innovative and international markets. As results we describe reactions to price-related information deficits and propose a typology of approaches chosen by pricing managers. The typology differentiates pricing managers’ reaction to price-related information deficits along market information situations and individual strategic reasoning. The results of our study contribute to an in-depth understanding of pricing practices and provide a conception of pricing reality in B2B companies.