The Intention of Implementing a Strategic Pricing Model: evidence from Indonesian Fashion Sector

Abstract

The strategic pricing model is the latest selling price determination model that considers a product's position in the product lifecycle and information about prices of competing products. This model is considered suitable to be applied for fashion products that are facing very tight competition and have a short lifecycle. This study investigates factors influencing the implementation of the strategic pricing model for products of Indonesian Small and Medium Enterprises (SMEs) in the fashion sector. Three variables under the Theory of Planned Behavior - attitudes toward behavior, subjective norms and perceived behavioral control -have been identified to explain the intention of SMEs in implementing the model. A survey questionnaire was distributed to 100 SME practitioners, and 85 practitioners responded to the questionnaire. The data were analyzed using multiple regression analysis. The findings of the study show that attitudes toward behavior and subjective norms have significantly and positively influenced intentions to implement the strategic pricing model. Meanwhile, perceived behavioral control did not affect the intention to implement the model. In general, the results indicate that the strategic pricing model is a useful model because it improves the quality of determined selling prices. However, SMEs still perceive accounting as a difficult skill to learn. In terms of practice, the results of this study are useful to determine the SMEs’ degree of interest in applying the strategic pricing model. This is particularly notable due to the novelty of this model which shows, based on previous research, that the majority of SMEs have not yet adequately implemented their accounting systems.

The Development of a Web-Based Strategic Pricing Application to Support the Sustainability of Creative-Based SMEs

“…Users enter the cost of the costs incurred along the cost lifecycle. Based on the study [16], the costs that are generally issued by SMEs for upstream activity are design costs, production costs, including raw materials, direct labor, and overhead costs [4]. The cost of downstream includes the cost of marketing, distribution, and service after-sales.…”

“…In addition, Indonesian SMEs also face "classic" problems, namely 1) not being ready to enter the digital era due to limited human resource capabilities and 2) not having sufficient competence in accounting and finance [2]. Due to the lack of accounting and financial skills, the phenomena that often appear are 1) unable to prepare financial reports and as a result they do not have access to formal financial institutions, particularly banks [3]; and 2) do not have sufficient and adequate data for decision making, including decisions in determining the selling price of products [4]. As a result, SME's products are inferior to similar products sold online and imported products, especially from China [5].…”

“…To introduce the concept of determining the selling price based on the concept of the Strategic Pricing Model, and empirical evidence on the positive perception of SMEs, that it is a useful model. The strategic price is a useful model because it considers the price of competitors' products to increase the quality of the selling price [4].…”

Small and Medium Enterprises Problem and Potential Solutions for Waste Management

“…Accounting is very useful in management control and decision makingfor example, describing the energy consumption, waste management existing landfill, and determining the product selling price requires the calculation of the cost of production [35], [36]. Bad information for waste management can result in increased production costs due to the determination of product selling prices based on instincts or market prices and waste generated.…”