During recent years corporations have been focusing on revenues rather than profits. This led to decreased margins and unstable financial performances. To increase profits, new pricing strategies have emerged. One promising pricing strategy that focuses on increasing profits is value-based pricing, which constitutes the monetising of customer perceived value. The purpose of this paper is to identify what factors influence customer perceived value in the global high-tech service industry. With this knowledge corporations can draw precise evaluations of customer perceived value and hence utilise value-based pricing in the best possible way. A qualitative method was used to study the case of MB Services, the service division of the Meyer Burger Technology Group, and the global high-tech service industry represented at the Hannovermesse 2011, an industrial exhibition in Hanover, Germany. The empirical data collected was analysed together with the theoretical framework. The findings are that customer perceived value of high-tech services is influenced by the overall benefits the customer can obtain from the service, the sacrifices in terms of costs the customer has to pay for the service, competitors’ offerings, different segments, subjective judgments of distinctive people within a corporation, and the industries’ and customers’ level of maturity. Customer perceived value is an underresearched subject, which requires further investigation.

Metrology is a concept that is not known by many, it is the science of measurement. For such an unknown concept it has significant importance to both the manufacturing companies and the customers as they both need to be sure that the final products are correct and of high quality. Therefore many companies have a quality system within their company to measure and calibrate their instruments. To ensure that the measuring instruments used are correct they need to be calibrated towards national and international standards. If you cannot do that at the company the service needs to be purchased externally. SKF, Svenska Kullagerfabriken AB, has a metrology service that they use for their own manufacturing that they have sold externally before and want to start selling again. The purpose of this study was to investigate what the main value drivers are in the metrology market and based on those values create a service offer. To investigate the purpose a case study of SKF’s metrology service was made and interviews were performed on nine manufacturing companies within the western region of Sweden, with focus on Gothenburg. The theoretical framework is based on the market positioning strategy by Lovelock & Wirtz (2011). The market positioning strategy includes a market section, an internal section and a competitor section. These parts can be seen all through the thesis as it guided the authors through the process. The empirical findings show the interview answers, the value drivers and the competitor response profile.   In the empirical chapter it was discovered that accreditation and accuracy are the two value drivers that the customers find most important in metrology. Those value drivers does both Mätcentrum and most of the competitors have. The empirical also show that the suppliers have a strong position in the market and can offer similar or more value than Mätcentrum. The conclusion is that it would be difficult for Mätcentrum to start selling their service externally again. This is due to the competition, mainly from existing competitors and suppliers in combination with the lack of differentiating elements in their offer. However there is still an opportunity for profitability if the communication of the values is adjusted after each customer’s need and received successfully.

Pricing is a complex yet important process that has a large influence on profitability; however few managers utilize pricing as a strategy to increase competitive advantage. The potential of pricing based on specific customer’s needs should be acknowledged, since it is beneficial for the customers by allowing them to recognize the true value of a product. It is also beneficial for marketers since they can present the price in the content of a total solution tailored for those customer needs. Even though a value-based pricing strategy is considered superior to alternative pricing strategies, few companies practice it. The limited amount of researches that has been conducted in the field of value-based pricing strategies has revealed various obstacles in the implementation phase. However, it is still not proved that these obstacles can be found in all industries. The purpose of this thesis is to present research in the field of pricing, by adding to prior research, practical observations on obstacles when implementing a value-based pricing strategy. A qualitative case study at Volvo Construction Equipment in Sweden was conducted and the results show similarities with prior researches. However additional obstacles were identified and further evidence from this study stresses the importance of possessing fundamental knowledge about value-based pricing strategies; as it impacts a company’s ability to implement it successfully and entirely. Therefore this thesis includes the fundamental knowledge and describes how obstacles connected to the concept are perceived in practice. Further a managerial framework is provided to help companies interested in implementing value-based pricing strategies.

Titel: Förutsättningar för värdebaserad prissättning: en fallstudie av den svenska anläggningsbranschen. Datum för slutseminarium: 2014-06-03. Program: Marknadsföringsprogrammet. Författare: Robin Sörensson, Albin Sköld och Jakob Sköld. Handledare: Peter Caesar. Examinator: Dr. Pejvak Oghazi. Nyckelord: Prissättning, värdebaserad prissättning, värdeskapande, värdeappriopriering. Syfte: Syftet med denna studie är att identifiera interna och externa faktorer som påverkar prissättningen samt beskriva vilka förutsättningar för tillämpning av värdebaserad prissättning dessa faktorer ger upphov till. Teoretiskt ramverk: Det teoretiska ramverket utgår från de två olika dominerande synsätten på värdeskapande och värdeappriopriering. Forskning på prissättning i förhållande till dessa synsätt hämtas i huvudsak från Porter (1980), Dutta et al. (2003) och Hallberg (2008). Metod: Studien bygger på en kvalitativ datainsamling genom intervjuer med personer inom ett utvalt fallföretag inom anläggningsbranschen och fyra av deras återförsäljare. Empiriskt resultat: Empirikapitlet innehåller den kvalitativa datan som samlats in genom intervjuerna och presenteras i form av en tabell samt preliminär dataanalys. Analys: Utifrån empirin och det teoretiska ramverket har externa och interna faktorer som påverkar utformandet av en prissättningsstrategi identifierats. Dessa faktorer har också delats upp i drivkrafter och hinder för att klargöra vilka förutsättningar för en tillämpning av värdebaserad prissättning som finns. Detta presenteras i form av tabeller och löpande text. Slutsatser: Sammantaget har tio faktorer som påverkar prissättningen inom anläggningsbranschen identifierats och beskrivits. Sex faktorer är branschrelaterade och fyra faktorer är resursrelaterade. Det kan ses tendenser till att de externa faktorerna bidrar mer till drivkrafter och de interna faktorerna till mer av hinder för en tillämpning av en värdebaserad prissättningsstrategi. / Title: Prerequisites for value-based pricing: a case study of the Swedish construction industry. Date of final seminar: 2014-06-03. Program: Marketing program. Authors: Robin Sörensson, Albin Sköld och Jakob Sköld. Advisor: Peter Caesar. Examiner: Dr. Pejvak Oghazi. Keywords: Pricing, value based pricing, value creation, value appropriation. Purpose: The purpose of this study is to identify internal and external factors affecting the pricing as well as describe the conditions for implementation of value-based pricing that these factors gives rise. Theoretical framework: The theoretical framework is based on the two dominant approaches to value creation and value appropriation. Research on pricing in relation to these approaches retrieved mainly from Porter (1980), Dutta et al. (2003) and Hallberg (2008). Methodology: The study is based on qualitative data collection through interviews with people within a selected case companies in the construction industry and four of their dealers. Empirical results: Empirical chapter includes the qualitative data collected through interviews and presented in tabular form as well as a preliminary data analysis. Analysis: Through the empirical result and the theoretical frameworks, external and internal factors affecting the design of a pricing strategy has been identified. These factors have also been divided into drivers and barriers to clarify the requirements for the application of value-based pricing that is available. This is presented in the form of tables and scrolling text. Conclusions: Overall, ten factors that affects the pricing of the construction industry has been identified and described. Six factors are industry-related and four factors are resource-related. Tendency’s can also been seen for that the external factors contributing more to the driving forces and the internal factors of more obstacles to the application of a value-based pricing strategy.

In today’s world, change is faster than ever with rapid technological development and increasing global competition. The effects of globalization have led to more intense international competition when competitors originate from different parts of the world. Thanks to the use of new information technology, transparency has increased and made it possible for customers to compare products and prices between suppliers and prices in different markets and also buy cross-border. This puts pressure on companies to differentiate and develop their competitive advantage. Pricing could be such an advantage. Organizations need to develop pricing strategies well adapted to meet these external changes and remain profitable. Value-based pricing strategy has proven to help companies to move away from discussions about pricing and instead focus on the unique value the company’s offerings can provide the customers. This is also the pricing strategy that creates the best opportunities to maximize the profit in every sales situation. Therefore, this study has investigated how OEMs work with value-based pricing strategy and pricing processes in the context of globalization and ICT.   This has been done by conducting a case study at the company Atlas Copco in Sickla, Sweden, that is market leader within sustainable production solutions. The case study consisted of interviews with, and a questionnaire sent out to, managers at Atlas Copco, Industrial Technique, General Industry, involved in the pricing process.   The results indicate that Atlas Copco strive to work with value-based pricing and are somewhat taken into consideration global trends affecting pricing and working internally with factors affecting pricing. Furthermore, the findings suggest that in order to use value-based pricing in the context of globalization, the company should state and implement a clear pricing strategy, decentralize pricing authority, provide the sales organizations with guidelines, training and communication platforms and work to move away from commodities.   The findings of this study have implication both in a theoretical and industrial aspect. From the theoretical aspect, the findings contributes to the existing research about value-based pricing, a research area which is usually fragmented and mostly describes what value-based pricing is, not how it is used, especially not in a global context. This study contributes with a case showing how OEMs are working with value-based pricing, taking into consideration both global trends and internal factors. From the industrial aspect, the results from this study give OEMs competitive advantage through following the findings about what internal and external factors to consider when working with their pricing strategy.

This paper’s aim is to analyze value-based pricing strategies in service contracts and how they help companies generate sustainable advantages. Scoop of the analysis will be service contracts in manufacturing industry. A service contract could be defined as an intangible value proposition that includes but not limited to maintaining client’s machines continuously for a negotiated amount of time. By working with a Swedish pricing consultancy firm Navetti AB, a descriptive research was conducted in an effort to answer the research question: “How to utilize a value-based pricing strategy in service contracts?”. By trying to answer this question, authors of this paper wanted to contribute to the developing framework of value-based pricing phenomena. Results of this study indicates that certain steps need to be followed by service providers in manufacturing industry in order to utilize a value-based pricing strategy. Obscure perceived value of customers need to be realized and their value drivers need to be extracted, quantified and analyzed. Findings of this study have implications both in theoretical and industrial perspective. From industrial aspect, service providers need to communicate with their customers deeply and analyze their value drivers, they also need to take cost-based and competition-based pricing strategies into consideration while utilizing a value-based pricing strategy. From the theoretical perspective this study contributes to the field of pricing and price optimization part of industrial management.

Companies within the manufacturing industry is undergoing changes in their business models to adapt to changing external environments and trends – whereas one general trend is toward servitization, the transition from hardware products to software services. These software services have shown to have an increasingly impactful role for former productbased firms to ensure future reliable profits and revenues. This thesis aims to contribute to the academical field of servitization and business model literature, within the context of a non-disruptive industry with a slow technological development rate. This is done by addressing the following purpose: to understand how hardware manufacturing companies can integrate software services in their existing business model. In order to fulfill this thesis’ purpose, the research questions answered address how a hardware manufacturing company’s business model can be affected by servitization, but also how the process of business model innovation can be facilitated in the organization. This master’s thesis is anchored in a qualitative, interpretive case study – where the empirical data has been gathered from semi-structured interviews and internal case company documents. The findings from this thesis show that servitization can affect company business model in several ways. The first one is the shift towards customercentricity, both in terms of the design of the value proposition and the way of working with the customers. However, the findings show that companies in this context may experience difficulties with designing a value proposition that is desirable to the customer. Problems with demonstrating the benefits of the servitized value proposition might also arise. Furthermore, this thesis also concludes that there can be issues in translating a manufacturing company’s value proposition into concrete revenue streams and moving from traditional cost-based pricing methods to value-based pricing strategies. Also, manufacturing companies in this context might struggle to realize its value proposition if there is not a sufficient amount of dedicated resources, competences and activities dedicated to completing the transition. This thesis also concludes that in order to facilitate the process of business model innovation within the organization, there needs to be a supportive culture to the innovation, but also clear goals and strategies that fits the overall strategies of the company. These strategies also need to be appropriately communicated within the organization. Companies might experience difficulties in rooting the business model in the overall strategy, and failing to do so can affect the internal perception of the innovation in a negative manner. This thesis aims to contribute to the understanding of the concepts of the business model and innovation of the business model in the context of servitization. This study is performed as a context-specific study within a non-disruptive industry with a slow technological development, which differs the study from earlier research within this research field.

Background:Fristads has noticed needs and necessity of high visibility work wear in the market, particular for the high risk working industries. In addition to it, new international standards for work wear will be introduced in year 2013 which may put higher requirements on visibility of the work wear. Fristads aims to be the first company to develop the new product and pricing is one of the major problems they encounter. After studying different relevant literatures, we have decided to approach the pricing problem using customer value based pricing as the starting-point.Purpose:To identify and analyse the pricing with focus on customer values and product launch. Methodology:My research methodology has a qualitative approach with a certain quantitative feature, and it follows the inductive reasoning. Uncontrolled studies of preferences and intentions have been used when three dealers and one end-customer were interviewed. Secondary sources have been reviewed and the critical pricing issues are identified. The primary data obtained from the interviews is made as foundation for the creation of the price strategy.Result:The interviews have shown that the customers like Fristads’ product idea and the design of the work wear with enhanced visibility. A probably accepted price on the new work wear has been defined according to the customer survey. Pricing strategies for the product launch focusing on the customer value have been recommended. The final decision on the price strategy shall however be made in concurrence with the other strategies at Fristads in order to cover all the aspects. / Program: Master Programme in Fashion Management

Title:Price Strategy for Product Launch – from the Customer Value Perspective Seminar date:29th August 2011Course:Master thesis in Fashion ManagementCredits:15 ECTSAuthor:Sandra Yin-Kwan KoTutor: Lisbeth Svengren HolmBackground:Fristads has noticed needs and necessity of high visibility work wear in the market, particular for the high risk working industries. In addition to it, new international standards for work wear will be introduced in year 2013 which may put higher requirements on visibility of the work wear. Fristads aims to be the first company to develop the new product and pricing is one of the major problems they encounter. After studying different relevant literatures, we have decided to approach the pricing problem using customer value based pricing as the starting-point.Purpose:To identify and analyse the pricing with focus on customer values and product launch. Methodology:My research methodology has a qualitative approach with a certain quantitative feature, and it follows the inductive reasoning. Uncontrolled studies of preferences and intentions have been used when three dealers and one end-customer were interviewed. Secondary sources have been reviewed and the critical pricing issues are identified. The primary data obtained from the interviews is made as foundation for the creation of the price strategy.Result:The interviews have shown that the customers like Fristads’ product idea and the design of the work wear with enhanced visibility. A probably accepted price on the new work wear has been defined according to the customer survey. Pricing strategies for the product launch focusing on the customer value have been recommended. The final decision on the price strategy shall however be made in concurrence with the other strategies at Fristads in order to cover all the aspects. / Program: Magisterutbildning i Fashion Management

Det finns i huvudsak tre väletablerade prissättningsstrategier; kostnadsbaserad,konkurrensbaserad och värdebaserad. Den värdebaserade prissättningsmetoden bestämmer ettpris baserat på produktens värde för användaren. I litteraturen anses den värdebaseradeprissättnings vara överlägsen de två andra prissättningsstrategierna, trots det använder sig deflesta företag av den kostnads- eller konkurrensbaserade strategin.Teoretikerna inom området anser att det finns svårigheter vid implementeringen avvärdebaserad prissättning som gör att företag väljer kostnads- eller konkurrensbaseradprisstrategi. Vi finner det därför intressant att undersöka varför ett företag väljer att frångå sinredan etablerade prissättningsstrategi och prissätta sina produkter utefter värdet som kundenuppelever. Med detta som grund valde vi att undersöka vilka bakomliggande faktorer som kanligga till grund för att adoptera värdebaserad prissättning samt vem eller vilka som styr ensådan organisationsförändring.Vår teoretiska referensram förklarar vad värdebaserad prissättning innebär samt vad somkrävs för att metoden effektivt ska implementeras. Vi har kopplat vår studie till signalteorioch institutionell teori. Empirin utgörs av material från intervjuer och observation som hargenomförts på Volvo Cars. Då Volvo Cars precis har börjat implementera värdebaseradprissättning på sina produkter har vi undersökt vad som gjorde att de valde att bytaprissättningsstrategi, vilka svårigheter de har haft, vilka som är delaktiga i processen samt ifallderas lönsamhet har ökat på grund av en ny prissättningsstrategi. Vi har genomfört vår studiegenom semistrukturerade intervjuer med personer som arbetar aktivit med prissättning hosVolvo Cars. Vi har även genomfört en observation genom att ta del av ett revenue forum däralla prissättningsfrågor presenteras och beslutas.I analysen har vi bearbetat empiri och teori som vi har samlat in under studien. Från våranalys bygger vi våra slutsatser som indikerar på att företag väljer att bytaprissättningsstrategi eftersom att de vill bli mer effektiva eller att deras tidigare prisstrategiinte är kompatibel i och med att företaget exempelvis genomgår produktförbättrinarg. Attlönsamheten ökar i takt med att företaget byter prissättningsstrategi behöver inte endast beropå att företaget har en ny prissättningsstrategi. I Volvo Cars fall har lönsamheten förbättrats ikombination av värdebaserad prissättning och bättre produkter. För att lyckas medvärdebaserad prissättning krävs det att företaget har förmåga att skapa medvetenhet om vilkafaktorer som kunderna värdesätter. / There is mainly three well established pricing strategies: cost based, competitor based andvalue based. The value based pricing strategy decides a price on the product based on thevalue for the user. In the litterature the value based princing strategy is considered to besuperior to the other two pricing strategys, even thoug a majority of companies use the costbased or competitor based strategy.Theorists in the field consider two difficulties with implementing value based pricing thatmake companies to choose cost based or competitor based pricing strategy. Therefore we findit interesting to investigate why a company choose to abandon their established pricingstrategy and price their products based on the value for the customer. On this bases wechoosed to investigate which underlying factors there might be for adopting value basedpricing and to study who controls this kind of organizational change.Our theoretical framework explains what value based pricing is and what is necessary to makethe implementation of the method effective. We have made a connection between our studyand signalling theory and insitutional theory. The emperical data is based on material from theinterviews and observations that we have made at Volvo Cars. Since Volvo Cars just recentlystarted implementing value based pricing on their products, we have studied what made themchange pricing strategy, what difficulties they have had, who are involved in the process andif their profitability has increased due to the new pricing strategy. We have made our studywith semi structured interviews with people who activly works with pricing at Volvo Cars.We have also made a observation by participating in a ”revenue forum” where all pricing arepresented and determined.We have combined the emperical data and the theoretical data in the analysis. From ouranalysis we build our conclusions that indicates on that a company choose a different pricingstrategy because they want to be more effective or that the previous pricing strategy doesn’tmatch with for exampel a company’s new product strategy. That the profitability exceeds atthe same time as the company change pricing strategy doesn’t have to be a effect of the newpricing strategy. At Volvo Cars the higher profitability is a result of the value based pricingcombined with better products. For a company to be successfull with value based pricing it isimportant that they have the ability to create awareness of which factors that the customervalues.