Feasibility for X company to switch its B2B pricing strategy from cost-plus pricing to value-based pricing in Asian market

Abstract

The globally operating X company, who is specialized on medical products manufacturing and exporting, now faces the challenge to sustain the sales and profitability when the cost has been increasing constantly due to the growing geopolitical uncertainty and inflationary pressures. An effective pricing strategy is needed to enhance profitability, especially in the Asian countries, because there the local customers have presumably different value perceptions towards Finnish innovative medical products. Therefore, the overall objective of this research is to evaluate the feasibility to switch the pricing strategy from cost-plus to value-based by identifying the key value elements that perceived important or to be improved by the clients in our products and services. Qualitative method of content analysis was applied to the research interviews with the selected clients from Myanmar, Thailand, Malaysia and Taiwan. The overall satisfaction to our products and services are relatively high among all the clients, but there are some different opinions from different clients regarding specific-elements value perceptions, and some value elements are perceived important and needing improvement. However, although most of the value elements improvement are already accomplished or under development, most of the clients are not willing to pay more to match the price to the value, because some of them still need time to experience and benefit from the improved features, also because the global inflation and country-specific restrictions and limitations during and after the pandemic, has impacted dramatically all market economy and customer demand and affordability. So it seems that it’s not yet the right time to switch the pricing strategy, most probably a follow-up research could be conducted with the same clients or even more clients from other Asian countries or region after the clients have gained more experience and market feedback to refresh their perception to the improved value elements in our services and products, and when the market has recovered fully from the pandemic.