Pricing in the service industry

According to Mckinsey Company's consultants, the fastest and most effective way for a firm to achieve maximum profit is to get its price right (Marn and Rosiello, 1992). These consultants reported that a 1 percent price improvement generates an average of 11.1 percent increase in profits among the 2,462 companies they studied. Given the importance of price in generating revenues and profits for a company, the approach used by service firms in price setting has been relatively unsophisticated. In …showed first 75 words of 833 total…

…showed last 75 words of 833 total…profit", Harvard Business Review, 70, September-October, 84-94. Zeithaml, V., Parasuraman, A., Berry, L.L., 1985Journal of Marketing Beard, L.H., Hoyle, V.A., 1976, "Cost accounting proposal for an advertising agency", Management Accounting, 58, 38-40. Kotler, P., Bloom, P.N., 1984, Marketing Professional Services, Prentice-Hall, Englewood Cliffs, NJ. Hoffman, K.D., Bateson, J.E.G., 1997, Essentials of Services Marketing, The Dryden Press, Orlando, FL. Ratza, C.L., 1993, "A client-driven model for service pricing", Journal of Professional Services Marketing, 8, 2, 55-64.