Benefits of Implementing Location-Specific Pricing for Company X and Strategies for Determining Price Lists

Abstract

This study explores the benefits of implementing location-specific pricing for Company X and provides strategic recommendations for determining these price lists. With different operational costs at each location, moving to location-based pricing would enable revenue optimization according to location cost structures and market dynamics. Financial and operational benefits were assessed by using location-specific pricing based on industry data, market analysis, and company-specific financials.

The thesis consists of theoretical and empirical parts. Firstly, a study was conducted of the theory and literature regarding location-specific pricing and its international trends in the service sector. The key influences and challenges of location-specific pricing were researched. Secondly, a financial analysis of Company X was made with a literature review and qualitative research methods. Company X’s income and cost structure were analysed with the current pricing strategy. The literature review and interviews contributed to creating outcomes and a suggested price list formula for calculating location-specific price lists for Company X. The interviews were carried out with expertise in the field of private daycare systems in Finland to provide valuable insights into the complex pricing strategy of Company X.

The findings indicate that location-specific pricing can enhance the profitability and competitiveness of Company X, given that implementation is supported by effective communication and strategic steps to minimize disparities. With better cost allocation Company X can ensure long-term viability and create financial buffer for future investments. The suggested price formula provides adaptability, scalability, and consistency. The price list formula ensures that all prices are both fair and well-justified. This thesis provides actionable insights in support of a decision to undertake a more customized pricing approach.