There are three common orientations for setting prices: cost-based, competition-based, or value-based. Academics have long extolled the virtues of value-based pricing, but practitioners continue to focus primarily on cost or competition based practices. There is a major disconnect here. Industrial pricing is a ‘problem of practice' desperate for the help of a practioner-scholar.
Enter Stephan Liozu (DM 2012). Through his work with theWeatherhead DM program, Stephan is investigating why this disconnect between research and practice exists and what it means, and he's starting to get some answers. Liouzu indicates that the adoption of value-based pricing is not as straightforward in practice as one might think. A shift to value-based pricing is often challenging for organizations to implement, in part due to the limits of human interpretation. Value-related issues are "difficult to define, conceptualize and measure" and the adoption of value-based pricing requires more than just a simple decision on the part of a manger, but often "requires an organizational transformation."
Stephan was a keynote speaker for the Professional Pricing Society's Annual Pricing Conference in Chicago on May 7, 2010. His one-hour presentation "Pricing Orientation in Business Markets: Gap between Theory and Practice" focused on the problem of practice in the area of the adoption of value-based pricing in small and medium industrial firms. This work was based on his first-year work in the DM program.
According to Stephan, "I came in the program with some basic idea of what my research interest was. The first year of the program was a challenging and rich journey... The DM program is intellectually powerful and enriching from the get go. A year into the program, I realize how much I have accomplished with the support from great advisors and faculty. Presenting my first paper in Chicago in May 2010 as a practitioner scholar confirmed the novelty and relevance of my research project. This program has awakened my interest in academic research that is grounded in practice and interdisciplinary in nature."
Stephan is President & CEO of Ardex / W.W. Henry Company, a manufacturer of high performance building products. Stephan has masters degrees from Institut d'Administration des Entreprises and Cleveland State University, and has also completed Harvard Business School's General Management Training Program. He is a visiting professor with the Unversite Toulouse, where he teaches international business-to-business pricing strategies.
