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The purpose of this paper is to describe the origins and development of the pricing function and to explore how companies are organizing for price management. Since the end of the 1990s, many companies have started initiatives towards price optimization, and moreover, have invested in pricing capabilities. The authors explain how the pricing function has evolved since then, and describe the roles and responsibilities assigned to pricing managers.

The authors conducted an empirical qualitative research based on 28 interviews with pricing managers (analysts, directors, chief pricing officers) in large companies in France. A lexical analysis has been conducted in order to develop a typology of pricing orientations and a description of the different ways of performing the function within the company.

The results describe three main stages (commodity, control, and value) corresponding to different levels of maturity of the pricing function. Many managers feel they lack opportunities to “push the price button”; this research shows that a progressive and systematic deployment of tools and capabilities allows companies to gain more pricing power.

The authors describe three main orientations in organizing for pricing management, as degrees of maturity of the pricing function. Practitioners will find information on how to deploy the function in their organization useful given the variety of industries and pricing contexts studied.

Many companies lack insights or fact-based support for the pricing decisions they make in an increasingly complex environment. In order to optimize their pricing process, managers need to identify key indicators that may influence the performance of their decisions. The purpose of this paper is to report an investigation of pricing determinants in large companies manufacturing capital goods in France. First a conceptual framework is proposed, in order to fill several gaps identified in the literature on pricing practices and more precisely by operating a distinction between environmental variables (determinants), decision making (pricing strategy and price and product-line structures) and its consequence in terms of price level.

The author conducted an empirical research on the determinants of the pricing process. This study consistedof a questionnaire survey addressed to pricing managers (or executives in charge of pricing) in 98 of the largest manufacturing companies in France about their new-product pricing decision-making process.

The author studies environmental determinants and their influence on the pricing and describes the structure of pricing determinants as a five dimensions construct: market-based, value-based, position-based, competition-based and production-based. The results show that firms rely on environmental determinants as indicators of their pricing flexibility. These indicators operate as pricing levers: a good position on these variables gives firms more pricing power. But in the vast majority of the cases, companies extensively relied on competitive conditions instead of taking advantage of a favorable position, described as pricing myopia.

This paper describes current pricing practices in leading companies with key informants (mainly pricing managers) highly involved in the pricing decision process, and contrasts two pricing orientations, pricing power vs pricing myopia.