What is the price of saving lives? : - A case-study on strategic pricing of fire safety products
Sammanfattning: This thesis regards pricing, more specifically how to price products no one wish to have use of, but that are invaluable once they come to use. This is a case study that investigates a specific product that is about to enter the market. The product is a fire safety product invented and patented by the company investigated, who also will sell the product. The product is a water-based fluid that due to a cooling effect and can extinguish and prevent fires. This thesis is looking into a product package developed by the company that includes the fluid mentioned above, namely the home defense kit. Back in the days, pricing used to be a rather simple process where the price used to be based solely on costs. Nowadays, due to technological development, the process of pricing has become more complex. Increased transparency and the ease to order products from anywhere in the world has developed the art of pricing, which now rarely is based only on costs but on the value which it creates for the customer. The research question of this thesis is as follows: What kind of price models can enable value capturing for products that no one wishes to use? To answer the research question of this thesis, existing theories on pricing and price models have been used as well as empirical data in the form of structured interviews with the company’s executive management team as well as with potential customers from the company’s customer segment. The result has shown that it is important to target the right group of customers and then develop a suitable price model for them. Not one single price model can be 100 percent right for all customers and/or environments. On the basis of Olve et.al’s (2013) Price Model Equalizer, the company’s price model has been identified as well as suggestions on alternative price models suitable for specific groups of customers.
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