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How to utilize a value-based pricing strategy in service contracts: A descriptive case study of how a Swedish pricing consultancy company optimizes pricing of services for its customers
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Marketing and Entrepreneurship.
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Marketing and Entrepreneurship.
2017 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This paper’s aim is to analyze value-based pricing strategies in service contracts and how they help companies generate sustainable advantages. Scoop of the analysis will be service contracts in manufacturing industry. A service contract could be defined as an intangible value proposition that includes but not limited to maintaining client’s machines continuously for a negotiated amount of time.

By working with a Swedish pricing consultancy firm Navetti AB, a descriptive research was conducted in an effort to answer the research question: “How to utilize a value-based pricing strategy in service contracts?”. By trying to answer this question, authors of this paper wanted to contribute to the developing framework of value-based pricing phenomena.

Results of this study indicates that certain steps need to be followed by service providers in manufacturing industry in order to utilize a value-based pricing strategy. Obscure perceived value of customers need to be realized and their value drivers need to be extracted, quantified and analyzed.

Findings of this study have implications both in theoretical and industrial perspective. From industrial aspect, service providers need to communicate with their customers deeply and analyze their value drivers, they also need to take cost-based and competition-based pricing strategies into consideration while utilizing a value-based pricing strategy. From the theoretical perspective this study contributes to the field of pricing and price optimization part of industrial management. 

Place, publisher, year, edition, pages
2017. , 59 p.
Series
Examensarbete INDEK, 2017:69
Keyword [en]
value-based pricing, pricing strategy, pricing process, service contracts, manufacturing industry
National Category
Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-209564OAI: oai:DiVA.org:kth-209564DiVA: diva2:1112799
External cooperation
Tord Ringenhall
Subject / course
Entrepreneurship and Innovation Management
Educational program
Master of Science - Entrepreneurship and Innovation Management
Presentation
2017-05-29, 243, Lindstedtsvägen 30, 100 44, Stockholm, 18:30 (English)
Supervisors
Examiners
Available from: 2017-07-11 Created: 2017-06-20 Last updated: 2017-07-11Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf