“Pay What You Want”: A Participative Price Setting Mechanism

Abstract

Traditionally, price is a major component of the marketing mix of companies, irrespective of their industry. Price used to be set by suppliers. In contrast, new approaches are visible in the practice of several companies; respectively customers take the initiative of price setting. The present paper aims to explore the pricing mechanism “Pay What You Want” that is focused on customers. The main objectives of the paper refer to the identification of: (i) specific features of this pricing approach; (ii) positive outcomes for companies and customers; (iii) challenges raised for economic operators and buyers; (iv) cases of companies from the international markets that applied such methods. The paper makes specific and detailed recommendations relative to the implementation of the “Pay What You Want” pricing mechanism that is based on the direct participation of customers.