Pricing of consulting in Vaasa : Exploratory case studdy research
Oliver Puerta, Irene (2018)
Oliver Puerta, Irene
Vaasan ammattikorkeakoulu
2018
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201805199073
https://urn.fi/URN:NBN:fi:amk-201805199073
Tiivistelmä
The existing research on consulting and the pricing of consulting activities is centered on the needs of large consulting firms which work for large companies with hundreds and thousands of employees. But how can consulting be better adapted to the demand of all businesses in small cities, and expand their market to tend to the needs of smaller companies as well?
In order to find an answer to this question, this research aims to study the current offering of consulting services in the Vaasa area as well as possible pricing alternatives that would innovate consulting services for large corporations as well as be capable to meet the needs of smaller sized businesses in small cities.
The theory review studied the existing concepts of consulting, the factors that determine how pricing is set in consulting services and the relationship between value and pricing. Then, in order to compare the theory and the reality of this area, an exploratory case study was utilized as the investigation method. Five local consultants from different industries were interviewed in order to find the ways in which they set their prices, how those prices are implemented in their projects, and the relationship between their pricing strategies and the ways in which they create value for their clients.
According to the research results, the consulting services in the Vaasa area do not offer a wide selection of affordable consulting services for small and medium sized businesses. Consulting in the area is centered on the needs of large corporations, and value-based pricing has not been extensively utilized in the area, as most projects are priced according to the negotiation of an offer between the consultants and their clients through cost-based and competitive pricing.
The respondents have a positive attitude towards value-based pricing. They find it a promising possibly profitable addition to the pricing strategies they currently utilize. Following this perception, a layered pricing model has been developed in order to expand the pricing strategies of consultants in this area. Whether the suggested model can adequately cater for the needs of small businesses is to be evaluated in further research.
In order to find an answer to this question, this research aims to study the current offering of consulting services in the Vaasa area as well as possible pricing alternatives that would innovate consulting services for large corporations as well as be capable to meet the needs of smaller sized businesses in small cities.
The theory review studied the existing concepts of consulting, the factors that determine how pricing is set in consulting services and the relationship between value and pricing. Then, in order to compare the theory and the reality of this area, an exploratory case study was utilized as the investigation method. Five local consultants from different industries were interviewed in order to find the ways in which they set their prices, how those prices are implemented in their projects, and the relationship between their pricing strategies and the ways in which they create value for their clients.
According to the research results, the consulting services in the Vaasa area do not offer a wide selection of affordable consulting services for small and medium sized businesses. Consulting in the area is centered on the needs of large corporations, and value-based pricing has not been extensively utilized in the area, as most projects are priced according to the negotiation of an offer between the consultants and their clients through cost-based and competitive pricing.
The respondents have a positive attitude towards value-based pricing. They find it a promising possibly profitable addition to the pricing strategies they currently utilize. Following this perception, a layered pricing model has been developed in order to expand the pricing strategies of consultants in this area. Whether the suggested model can adequately cater for the needs of small businesses is to be evaluated in further research.