An industrial marketing problem pricing of products for substitution(French)

Date of publication: June 15, 1969

Author: Pierre Jourdan

Abstract:

Pricing methods for industrial products are sometimes (as in France for instance) less sophisticated than methods used for pricing consumer goods. There are a number of reasons for this difference, one of which is the specificity of each industrial product; another, the difficulty in forecasting consumer reactions. The purpose of the present article is to present methods generally used in France for pricing industrial products. Difficulties and limitations of these methods are succinctly outlined. It is possible to make progress if one takes into account: - that there are relatively few totally new products, as a new product is at least partially a substitution for another; - that the purchaser acquires a service/product entirety, and not just an isolated product. These considerations are basic to the price equivalence method. A practical application of this theory, pricing of natural gas for industrial use, makes up the essential part of the speech and the second part of the present article. Difficulties encountered, precautions taken, and principal results have been described and illustrated with diagrams and charts. Numerous maps, diagrams and tables, presented on epidiascope, accompany this paper.

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