Towards Value Based Pricing in B2B Heavy Equipment Manufacturing Company
Väänänen, Jere (2022)
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022053013029
https://urn.fi/URN:NBN:fi:amk-2022053013029
Tiivistelmä
In increasingly competitive markets, price is amongst the most important aspects of a company's marketing strategy. A company may flourish and grow in compliance with its long-term plan by discovering the optimum pricing techniques in varying conditions.
This thesis is a literature review in this regard, with the goal of presenting a transformation roadmap for the case company to begin their journey towards value-based pricing strategy. The case company is a well-known heavy equipment manufacturer. The company operates in B2B mining industry offering its customers in-depth mining industry expertise and productivity through cutting-edge solutions and technology.
The study begins by briefly addressing overview of B2B marketing including price as a key component. Following that, pricing is examined in greater depth, including its strategies and other relevant aspects. The objectives of the study included presenting pricing strategies to three principal approaches: cost-based, market-based, and value-based pricing. After introducing price and its many elements, research delves deeper into value-based pricing and investigates how to identify and capture value.
Information for the above was gathered by having a dialogue with executives and personnel from the case company who were knowledgeable about pricing, and the author became acquainted with the material offered by the school's library and the case company. Marketing and pricing manuals, as well as scholarly journals, were used in the research.
As a following part, the case company’s current state of pricing is summarized and analyzed. A recommendation is made based on the current state analysis and investigated information. As a result of the research a roadmap for transforming from cost-based pricing to value-based pricing is presented as the recommendation. The roadmap provides a good opportunity for the case business to improve its current pricing strategy, which was missing several critical components. Furthermore, the created roadmap forms a good base setting to begin developing pricing forward. Once the key components are taken into use, it can be further improved by regular analysis and continuous improvement.
This thesis is a literature review in this regard, with the goal of presenting a transformation roadmap for the case company to begin their journey towards value-based pricing strategy. The case company is a well-known heavy equipment manufacturer. The company operates in B2B mining industry offering its customers in-depth mining industry expertise and productivity through cutting-edge solutions and technology.
The study begins by briefly addressing overview of B2B marketing including price as a key component. Following that, pricing is examined in greater depth, including its strategies and other relevant aspects. The objectives of the study included presenting pricing strategies to three principal approaches: cost-based, market-based, and value-based pricing. After introducing price and its many elements, research delves deeper into value-based pricing and investigates how to identify and capture value.
Information for the above was gathered by having a dialogue with executives and personnel from the case company who were knowledgeable about pricing, and the author became acquainted with the material offered by the school's library and the case company. Marketing and pricing manuals, as well as scholarly journals, were used in the research.
As a following part, the case company’s current state of pricing is summarized and analyzed. A recommendation is made based on the current state analysis and investigated information. As a result of the research a roadmap for transforming from cost-based pricing to value-based pricing is presented as the recommendation. The roadmap provides a good opportunity for the case business to improve its current pricing strategy, which was missing several critical components. Furthermore, the created roadmap forms a good base setting to begin developing pricing forward. Once the key components are taken into use, it can be further improved by regular analysis and continuous improvement.