levy_03

Emory University
Department of Economics
Working Papers

Title: Shattering the Myth of Costless Price Changes: Emerging Perspectives on Dynamic Pricing *

Number: 03-25

Author: Mark Bergen, Shantanu Dutta, Daniel Levy, Mark Ritson and Mark Zbaracki

Issue Date: November 2003

Abstract: In this paper we argue that pricing is all about price changes, and that the costs of price changes are often simultaneously subtle and substantial. We discuss a framework to deal with the dynamics of changing prices. This framework incorporates customer interpretations of price changes, an awareness of the organizational costs of price changes, investments in future pricing processes, and an understanding of the role that supply chains play in price change strategy. The framework can be used at the tactical level to improve the specific price changes chosen and made, at the managerial level to decide whether or not to make a particular price change at all, and at the strategic level to determine what price adjustment processes should be invested in to improve pricing effectiveness in the future.

Title:	Shattering the Myth of Costless Price Changes: Emerging Perspectives on Dynamic Pricing *
Number:	03-25
Author:	Mark Bergen, Shantanu Dutta, Daniel Levy, Mark Ritson and Mark Zbaracki
Issue Date:	November 2003
Abstract:	In this paper we argue that pricing is all about price changes, and that the costs of price changes are often simultaneously subtle and substantial. We discuss a framework to deal with the dynamics of changing prices. This framework incorporates customer interpretations of price changes, an awareness of the organizational costs of price changes, investments in future pricing processes, and an understanding of the role that supply chains play in price change strategy. The framework can be used at the tactical level to improve the specific price changes chosen and made, at the managerial level to decide whether or not to make a particular price change at all, and at the strategic level to determine what price adjustment processes should be invested in to improve pricing effectiveness in the future.

* European Management Journal, forthcoming

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