5. Concluding remarks
The academic journey of Peter J. LaPlaca commenced in the early 70s decade with a publication about UP, a new phenomenon in the Northeastern area of the United States and currently disseminated over the world. This work influenced more than seventy high quality publications in reputable scholarly journals such as JM and IMM. The UP policy sought to help customers to maximize their return over the investment while shopping, leading to the purchase of the cheapest alternative available, finding inconsistent results in the early studies. After several years of research there is scientific consensus, UP contributes to B2C decision making, from customer perspective, mainly (1) diminishing the time of choosing an option among a set of alternatives and (2) reducing the cost of the average purchase per category. However, this perspective leaves out an important feature of any offering: the perceived customer value. The idea as a whole is positive and consumers express gratitude, but it leads to “commoditization” and creates new challenges for marketers in order to reach differentiation. This can be analyzed as favorable to the marketing function because indirectly enhance its relevance inside the organization.
In B2B settings, UP without any modification to the approach can be extremely dangerous and even counter-productive for both customers and suppliers. The inclusion of a value-based perspective seems appealing, but it is not exempt of difficulties. On the one hand, (ir)rationality and bias in the procurement process of industrial customers already leads towards the cheapest alternative (nominal cost). On the other hand, suppliers generally lack of sophisticated approaches to customers and struggle with open quantitative comparisons. Moreover, the negotiation processes tend to be formal (e.g., electronic bidding), minimizing human contact which is necessary to increase receptivity and facilitate influence. A value-based perspective requires a relational interaction approach between the buyer and the seller and reaching influential stakeholders (e.g., influencers in the decision making unit) at early stages of the buying process (Töytäri et al., 2015). Taking into account the challenges involved from a value-based approach, we integrated UP and value-based pricing to introduce unit value-based pricing and contribute to B2B pricing theory; entailing two research streams of Peter LaPlaca: UP and contingency pricing. This new approach stresses the relevance of articulating value propositions and separating the economic contribution of each element. Then, the vendor approaches the customer with a directed message, concentrating on the benefits that relate closer to their particular interests.
