Framework for product and service pricing in a manufacturing firm

This thesis examines the pricing of offerings in an industrial context. The purpose of this thesis is to give suggestions on how to develop the pricing of products and services in the case company. The main research question is: What changes and upgrades are needed towards successful product and service pricing in the case company? The objective is to identify the elements relevant to the pricing of offerings, to estimate how suc-cessfully the elements are implemented in the case company, and to give suggestions for the case company on how to develop their product and service pricing as part of sales. In this research, a constructive research approach was used where the empirical data were collected through semi-structured interviews and observations. The theoretical part of the study examines the relevant elements in the pricing literature. Based on the litera-ture review an initial framework for service pricing was built to direct the analysis of the empirical data. The empirical part of the research studied the pricing elements de-rived from both the case company’s pricing practices and from previous literature. The main findings of the research were that the case company is considering all of the pricing elements identified in the literature. There were also three new pricing elements found in the empirical research which emerged from interviews and observation rounds. The most important pricing elements proposed for development due to their current weak implementation were: the IT systems, pricing guidelines, and cost estimation. Al-so other improvement needs were identified concerning the other pricing elements and, therefore, a three step process is suggested, to cover the promotion of all the pricing elements needing development in the future. Possible future research topics could study the use of the newly identified elements in the pricing of offerings