This study sheds light on the evolution of the specialized marketing capability, pricing. We develop an operationalization for and empirically validate the pricing–capability dimensions from the perspective of the resource–based view. Using a sample of 420 technology–based ventures, we examine the relationship between pricing capabilities and firm performance, with a particular focus on how age and uncertainty impact these relationships to determine how entrepreneurial firms can profit. We deconstruct pricing capability into four dimensions—price discrimination, dynamic orientation, performance goal orientation, and value delivery—to show, for example, that young companies should focus on their price discrimination capability to improve performance.
AldrichH.E. & AusterE. (1986). Even dwarfs started small: Liabilities of age and size and their strategic implications. In CummingsL.L. & StawB.M. (Eds.), Research in organizational behavior (pp. 165–189). San Francisco, CA: Jai Press.
3.
AmitR., GlostenL., & MullerE. (1993). Challenges to theory development in entrepreneurship research. Journal of Management Studies, 30(5), 815–834.
4.
ArmstrongJ. & OvertonT. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(3), 396–402.
5.
AthanassopoulosA.D. (2000). Customer satisfaction cues to support market segmentation and explain switching behavior. Journal of Business Research, 47(3), 191–207.
6.
AutioE., GeorgeG., & AlexyO. (2011). International entrepreneurship and capability development—Qualitative evidence and future research directions. Entrepreneurship Theory and Practice, 35(1), 11–37.
BarneyJ.J.B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
9.
BaronR.M. & KennyD.A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182.
10.
BarronD.N., WestE., & HannanM.T. (1994). A time to grow and a time to die: Growth and mortality of credit unions in New York City, 1914–1990. American Journal of Sociology, 100, 381–421.
11.
BerthonP., EwingM.T., & NapoliJ. (2008). Brand management in small to medium–sized enterprises. Journal of Small Business Management, 46(1), 27–45.
12.
BjerkeB. & HultmanC.M. (2002). Entrepreneurial marketing: The growth of small firms in the new economic era. Cheltenham, UK: Elgar.
13.
BrandenburgerA.M. & StuartH.W. (1996). Value–based business strategy. Journal of Economics and Management Strategy, 5(1), 5–24.
14.
BrettelM., EngelenA., MüllerT., & SchilkeO. (2011). Distribution channel choice of new entrepreneurial ventures. Entrepreneurship Theory and Practice, 35(4), 683–708.
15.
BurnsT. & StalkerG.M. (1966). The management of innovation (2nd ed.). London: Associated Book Publishers.
16.
CarsonD., CromieS., McGowanP., & HillJ. (1995). Marketing and entrepreneurship in SMEs: An innovative approach. London: Prentice Hall.
17.
CarsonD.J. (1985). The evolution of marketing in small firms. European Journal of Marketing, 19(5), 7–16.
18.
ChanK.W., YimC.K., & LamS.K. (2010). Is customer participation in value creation a double–edged sword? Evidence from professional financial services across cultures. Journal of Marketing, 74, 48–64.
19.
ChintaguntaP.K., DubéJ.P., & SinghV. (2003). Balancing profitability and customer welfare in a supermarket chain. Quantitative Marketing and Economics, 1(1), 111–147.
20.
ChurchillG. (1979). A paradigm for developing better measures of marketing constructs. Journal of Marketing Research, 16(1), 64–73.
21.
CohenJ. & CohenP. (1983). Applied multiple regression/correlation analysis for the behavioral sciences. Hillsdale, NJ: Erlbaum.
22.
CohenW. & LevinthalD. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(2), 128–152.
23.
CovinJ. & SlevinD. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75–87.
24.
DayG.S. (1994). The capabilities of market–driven organizations. Journal of Marketing, 58, 37–52.
25.
DessG. & RobinsonR. (1984). Measuring organizational performance in the absence of objective measures: The case of the privately–held firm and conglomerate business unit. Strategic Management Journal, 5(3), 265–273.
26.
DeVellisR.F. (2003). Scale development—Theory and applications. Thousand Oaks, CA: Sage.
27.
DierickxI. & CoolK. (1989). Asset stock accumulation and sustainability of competitive advantage—Reply. Management Science, 35(12), 1514.
28.
DolanR.J. & SimonH. (1996). Power pricing—How managing price transforms the bottom line. New York: The Free Press.
29.
DuttaS., ZbarackiM.J., & BergenM. (2003). Pricing process as a capability: A resource–based perspective. Strategic Management Journal, 24(7), 615–630.
30.
EisenhardtK.M. & MartinJ. (2000). Dynamic capabilities: What are they?Strategic Management Journal, 21(10–11), 1105–1121.
31.
FioritoS. & LaForgeR. (1986). A marketing strategy analysis of small retailers. American Journal of Small Business, 10(4), 7–17.
32.
FitzpatrickA.A. (1964). Pricing methods of industry. Boulder, CO: Pruett Press.
33.
FornellC. & BooksteinF.L. (1982). Two structural equation models: LISREL and PLS applied to consumer exit–voice theory. Journal of Marketing Research, 19(4), 440–452.
34.
FornellC. & LarckerD. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
35.
FreemanJ., CarrollG.R., & HannanM.T. (1983). The liability of newness: Age dependence in organizational death rates. American Sociological Review, 48, 692–710.
36.
GatignonH. & XuerebJ.–M. (1997). Strategic orientation of the firm and new product performance. Journal of Marketing Research, 34(1), 77–90.
37.
GrantR.M. (1996). Toward a knowledge–based theory of the firm. Strategic Management Journal, 17(Special Summer Issue), 109–122.
38.
GreinerL.E. (1972). Evolution and revolution as organizations grow. Harvard Business Review, 50(4), 37–46.
39.
GruberM. (2003). Research on marketing in emerging firms—Key issues and open questions. International Journal of Technology Management, 26(5–6), 600–620.
40.
GruberM. (2004). Marketing in new ventures: Theory and empirical evidence. Schmalenbach Business Review, 56(2), 164–199.
41.
GruberM. (2005). Process matters—Empirical evidence of the value of marketing planning in VC–backed startups. Academy of Management Proceedings, 1, 1–6.
42.
HallowellR. (1996). The relationships of customer satisfaction, customer loyalty, and profitability: An empirical study. International Journal of Service Industry Management, 7(4), 27–42.
43.
HannanM.T. & FreemanJ. (1984). Structural inertia and organizational change. American Journal of Sociology, 49, 149–164.
44.
HelfatC. & PeterafM. (2003). The dynamic resource–based view: Capability lifecycles. Strategic Management Journal, 24(October Special Issue), 997–1010.
45.
HillsG. & LaForgeR. (1992). Research at the marketing interface to advance entrepreneurship theory. Entrepreneurship Theory and Practice, 16(3), 33–59.
46.
HillsH., HultmanC., & MilesM. (2008). The evolution and development of entrepreneurial marketing. Journal of Small Business Management, 46(1), 99–112.
47.
HullandJ. (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2), 195–204.
48.
JarvisC., MacKenzieS., PodsakoffP., MickD., & BeardenW. (2003). A critical review of construct indicators and measurement model misspecification in marketing and consumer research. Journal of Consumer Research, 30(2), 199–218.
49.
Katz–NavonT.Y. & GoldschmidtC. (2009). Goal orientation in negotiations: The influence of goal orientations on fixed–pie perceptions and bargaining outcomes. International Journal of Psychology, 44(1), 60–70.
50.
KazanjianR.K. & DrazinR. (1990). A stage–contingent model of design and growth for technology based new ventures. Journal of Business Venturing, 5(3), 137–150.
51.
KhanR.J. & JainD.C. (2005). An empirical analysis of price discrimination mechanisms and retailer profitability. Journal of Marketing Research, 42(4), 516–524.
52.
KhavulS., Pérez–NordtvedtL., & WoodE. (2010). Organizational entrainment and international new ventures from emerging markets. Journal of Business Venturing, 25(1), 104–119.
53.
KlassenR.D. & JacobsJ. (2001). Experimental comparison of web, electronic and mail survey technologies in operations management. Journal of Operations Management, 19(6), 713–728.
54.
KrasnikovA. & JayachandranS. (2008). The relative impact of marketing, research–and–development, and operations capabilities on firm performance. Journal of Marketing, 72, 1–11.
55.
KumarN., SternL.W., & AndersonJ.C. (1993). Conducting interorganizational research using key informants. Academy of Management Journal, 36(6), 1633–1651.
MillerD. & FriesenP.H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1–25.
59.
MillerD. & FriesenP.H. (1984). A longitudinal study of the corporate life cycle. Management Science, 30(10), 1161–1183.
MontgomeryC.A. & WernerfeltB. (1988). Diversification, Ricardian rents, and Tobin's q. RAND Journal of Economics, 19(Winter), 623–632.
62.
MooreG.A. (Ed.). (2002). Crossing the chasm. New York: HarperBusiness.
63.
MorganN.A., AndersonE.W., & MittalV. (2005). Understanding firms’ customer satisfaction information usage. Journal of Marketing, 69(3), 131–151.
64.
MorganN.A., SlotegraafR.J., & VorhiesD.W. (2009). Linking marketing capabilities with profit growth. International Journal of Research in Marketing, 26, 284–293.
MorrisM.H. (1987). Separate prices as a marketing tool. Industrial Marketing Management, 16(2), 79–86.
67.
MorrisM.H., SchindehutteM., & LaForgeR.W. (2002). Entrepreneurial marketing: A construct for integrating emerging entrepreneurship and marketing perspectives. Journal of Marketing Theory and Practice, 10(4), 1–19.
68.
NobleP.M. (1994). Determinants of industrial pricing decisions. Unpublished dissertation, The University of Iowa.
69.
NobleP.M. & GrucaT.S. (1999). Industrial pricing: Theory and managerial practice. Marketing Science, 18(3), 435–454.
70.
O'DwyerM. & RyanE. (2000). Management development issues for owners/managers of micro–enterprises. Journal of European Industrial Training, 24(6), 345–353.
71.
PelhamA. (1999). Influence of environment, strategy, and market orientation on performance in small manufacturing firms. Journal of Business Research, 45(1), 33–46.
72.
PeterafM. (1993). The cornerstones of competitive advantage: A resource–based view. Strategic Management Journal, 14(3), 179–191.
73.
PiercyN.F., CravensD.W., & LaneN. (2010). Thinking strategically about pricing decisions. Journal of Business Strategy, 31(5), 38–48.
74.
PodsakoffP.M. & OrganD.W. (1986). Self–reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531–544.
75.
RamaswamiS.N., SrivastavaR.K., & BhargavaM. (2009). Market–based capabilities and financial performance of firms: Insights into marketing's contribution to firm value. Journal of the Academy of Marketing Science, 37, 97–116.
76.
RaoV.R. (1984). Pricing research in marketing: The state of the art. Journal of Business, 57(1), 39–60.
77.
ReuberA.R. & FischerE. (2005). The company you keep: How young firms in different competitive contexts signal reputation through their customers. Entrepreneurship Theory and Practice, 29(1), 57–78.
78.
RobertsonT.S. & GatignonH. (1986). Competitive effects on technology diffusion. Journal of Marketing, 53(1), 1–12.
79.
RomanelliE. (1989). Environments and strategies of organization start–up: Effects on early survival. Administrative Science Quarterly, 34(3), 369–387.
80.
SapienzaH.J., AutioE., GeorgeG., & ZahraS.A. (2006). A capabilities perspective on the effects of early internationalization on firm survival and growth. Academy of Management Review, 31(4), 914–933.
81.
SchoonhovenC., EisenhardtK., & LymanK. (1990). Speeding products to market: Waiting time to first product introduction in new firms. Administrative Science Quarterly, 35(1), 177–207.
82.
ShepherdD.A. & ShanleyM. (1998). New venture strategy: Timing, environmental uncertainty, and performance. London: SAGE Publications.
83.
SimmondsK. (1999). International marketing: Avoiding the seven deadly traps. Journal of International Marketing, 7(2), 51–62.
84.
SimoninB.L. (1999). Transfer of marketing know–how in international strategic alliances: An empirical investigation of the role and antecedents of knowledge ambiguity. Journal of International Business Studies, 30(3), 463–490.
85.
SineW.D., MitsuhashiH., & KirschD.A. (2006). Revisiting Burns and Stalker: Formal structure and new venture performance in emerging economic sectors. Academy of Management Journal, 49(1), 121–132.
86.
SlaterS.F. & MohrJ.J. (2006). Successful development and commercialization of technological innovation: Insights based on strategy type. Journal of Product Innovation Management, 23(1), 26–33.
87.
SlaterS.F. & NarverJ.C. (2000). Intelligence generation and superior customer value. Journal of the Academy of Marketing Science, 28(1), 120–127.
88.
SteenkampJ.–B. & BaumgartnerH. (1998). Assessing measurement invariance in cross–national consumer research. Journal of Consumer Research, 25, 78–90.
89.
StinchcombeA.L. (1965). Social structure and organizations. In MarchJ.G. (Ed.), Handbook of organizations (pp. 153–193). Chicago, IL: Rand McNally.
90.
TellisG.J. (1986). Beyond the many faces of price: An integration of pricing strategies. Journal of Marketing, 50(4), 146–160.
91.
TerpstraD. & OlsonP. (1993). Entrepreneurial start–up and growth: A classification of problems. Entrepreneurship Theory and Practice, 17(3), 5–19.
TyebjeeT., BrunoA., & McIntyreS. (1983). Growing ventures can anticipate marketing stages. Harvard Business Review, 61(1), 63–66.
94.
UtterbackJ.M. (1971). The process of technological innovation within the firm. Academy of Management Journal, 14(1), 75–88.
95.
van GelderenM., FreseM., & ThurikR. (2000). Strategies, uncertainty and performance of small business startups. Small Business Economics, 15(3), 165–181.
96.
VorhiesD.W. & MorganN.A. (2005). Benchmarking marketing capabilities for sustainable competitive advantage. Journal of Marketing, 69, 80–94.
97.
VorhiesD.W., MorganR.E., & AutryC.W. (2009). Product–market strategy and the marketing capabilities of the firm: Impact on market effectiveness and cash flow performance. Strategic Management Journal, 30, 1310–1334.
98.
WelshJ. & WhiteJ. (1981). A Small business is not a little big business. Harvard Business Review, 59(4), 18–32.
99.
WernerfeltB. (1984). A resource–based view of the firm. Strategic Management Journal, 5(2), 171–180.
100.
ZahraS.A., SapienzaH.J., & DavidssonP. (2006). Entrepreneurship and dynamic capabilities: A review, model and research agenda. Journal of Management Studies, 43(4), 917–955.
