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Towards a Data-Driven Pricing Decision: With the Help of A/B Testing
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
2016 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

An A/B test is implemented on a SaaS rm's product page to examine the dierence in conversion rates from website visitors who are randomly assigned to two dierent product-landing pages that show dierent prices. To count as a successful conversion the visitors that view a product-landing page have to click on a \Free Trial" button. Half of the group will be assigned the treatment page, which will state higher prices and the other half will be assigned the controlled page, which will state today's current price. The only variant that will dier from the two pages will be the stated price of the product and all other factors will be kept constant. The controlled experiment is executed to get a sense of customers' price sensitivity, hence this thesis contributes to microeconomic research of the private sector, more specically to the ICT industry by using a novel approach with the help of A/B testing on prices. The results showed no statistical signicance difference between the two variations, which can be translated to accepting the null hypothesis; the demand for a particular Software-As-A-Service product will hold unchanged after the proposed price increase. At first, this could be a surprising result but when looking into the industry, which the rm participates in and their early mover advantages this result could have been assumed.

Place, publisher, year, edition, pages
2016. , 52 p.
Keyword [en]
Microeconomics, Controlled Experiment, A/B Testing, Price Sensitivity
National Category
Business Administration
URN: urn:nbn:se:kth:diva-188579OAI: diva2:936906
Subject / course
Industrial Economy and Entrepreneurship
2016-05-27, 16:52 (English)
Available from: 2016-06-22 Created: 2016-06-14 Last updated: 2016-06-22Bibliographically approved

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Oskarsdottir, Eyglo
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