How to differentiate by price: Proposal for a five-dimensional model

SummaryThe purpose of this article is to analyse the repertoire of possible price models that organisations may deploy for their products and services. This is attained by developing the SBIFT model that suggests that organisations can differentiate by price along five dimensions. Previous research on pricing has been dispersed across different academic disciplines. This article offers a more integrated perspective, derived from earlier theory as well as discussions in a collaborative research project with the international telecom company Ericsson. The model can be used as a tool for price modelling in a descriptive and prescriptive sense. Altogether, this article uncovers implicit features of price models, and by doing so it illustrates how an organisation can differentiate and re-invent their offering based on price.

► Explores the repertoire of possible price models that organisations may deploy for their offerings.
► Develops the SBIFT model that suggests that organisations can differentiate by price along five dimensions.
► Shows how organisations can differentiate and re-invent their offering based on price.
► The article is the outcome of a collaborative research project with the company Ericsson.
► The SBIFT model can be used for both descriptive and prescriptive purposes.