A price-determining model for industrial “technology-push” innovations

Type of the article: Research ArticleAbstractThe complexity of industrial markets in the Fourth Industrial Revolution necessitates new pricing approaches for R&D outcomes. “Technology-push” innovations often feature advanced technical parameters that are misaligned with customers’ willingness to pay, creating a commercialization gap that requires models that integrate cost, competition, and perceived value. The aim of this study is to develop a price-determining model for industrial “technology-push” innovations. The authors’ price-determining model for industrial “technology-push” innovations combines cost-plus pricing and competitive pricing with the Price Sensitivity Measurement (PSM) analysis. Empirical data from 2022 to 2025 in optical interferometry were used to validate the approach. In the case of “technology-push” innovations, a gap may exist between the perceived value of technical parameters and the price that industrial customers are willing to pay. The trade-off between technical parameters and price refers to the balance or compromise that customers and industrial marketers must consider when making a purchase. Setting the right price on industrial “technology-push” products requires a comprehensive analysis of customer preferences, competitive landscape, and cost structures. Customers’ perception of value directly influences their willingness to pay for a product or service. Even if a product is technically superior or offers advanced features, its perceived value by customers ultimately determines the optimal price point. Aligning pricing with customer perceptions of value helps maximize revenue and profitability for both transaction participants. The authors’ method enables the determination of the boundaries of the market price range for an innovation with sufficient accuracy. Combining traditional pricing methods with price sensitivity analysis of industrial customers can offer several advantages, leveraging the strengths of each approach to improve the price-determining process for industrial “technology-push” innovations.