Capture and Communicate Value in the Pricing of Services

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Widespread pricing mismanagement plagues service industries because too many services marketers ignore the special challenges of pricing intangible products. The authors discuss the implications of this kind of pricing in today's highly competitive conditions and offer a framework that reconciles the implications with customers' quest for value. Three distinct but related strategies for services pricing — satisfaction-based pricing, relationship pricing, and efficiency pricing — can help services marketers capture and communicate value through their pricing.

Leonard L. Berry holds the J.C. Penney Chair in Retailing Studies and is professor of marketing and director of the Center for Retailing Studies, Texas A&M University. Manjit S. Yadav is assistant professor of marketing at Texas A&M.

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