‘Price-setting is one of the most difficult marketing decisions'
The price of products and services plays an enormous role in society, and therefore also in the legal domain, according to Professor of Business Studies. Inaugural lecture 2 June.
The title of Van der Rest's inaugural lecture is 'The importance of price'. Developments in business science and their implications for the law point to three very different areas in which price plays a role in a legal context: increasing competition in the legal sector, disputes about price in case law and opportunities for academic research on the consequences of legal measures relating to price.
Enrepreneurial attitude
‘Price-setting is one of the most difficult marketing decisions,' Van de Rest believes. 'And it is crucially important because it has an effect on profit. I would like to see more attention paid to pricing in law programmes. Our students go off to work in a sector that is becoming increasingly competitive. Invoicing based on an hourly rate is a thing of the past. Prices have to be negotiated even in the legal world, which means it's absolutely essential to have an entrepreneurial attitude.'
Administration of the law
Price also plays a role in the administration of the law: judges often have to make decisions about price. What price is reasonable, standard, too low or too high if it's a matter of expropriation, buying out shareholders or child maintenance? Judges base themselves on economic analyses, but these too have their limitations. 'Three assessors can easily come up with three different prices. It's a real challenge for judges to draw conclusions, in fact there are times when it's impossible.' Van der Rest believes that attention to this issue should be a structural part of law programmes.
Special offer
Academic research can help with issues relating to price. For example, research on assumed behaviours and the consequences of legal measures relating to prices, such as the obligation to indicate the price per unit (kilo or litre) on products. The question is whether policy makers understand the effects of such measures on behaviour. ‘Marketeers are fully up to date with these issues and will not fail to use this knowledge to their own advantage,' says Van der Rest. ‘For example, they might first raise prices and then lower them again as a "special offer" to make consumers think they are getting a reduction.' He mentions that more research is needed on 'questionable pricing practices' on internet. 'I'm concerned about deception and even discrimination that are going on.'
Connections
Research on pricing is part of the job description of the new professor, who is also working on a very different subject: turnaround management - turning round companies that are performing poorly.'It's a very broad chair. What's important is to look for connections with other disciplines, such as civilology (the empiric study of private law - Ed) and company law. I am at the service of the Law Faculty. The success of this chair depends on my being able to make a contribution to legal research based on empiric research methods and insights from business science.’ In his teaching, Van der Rest wants to train law students to develop a more entrepreneurial mindset. 'Such an attitude will be invaluable for now and for their future.'