Global Pricing Strategy for a Quick-Service Restaurant Chain

The purpose of this paper is to compare prices for a popular quick-service restaurant chain (i.e. McDonalds’) across countries throughout the world using the “Big Mac Index” published by “The Economist.” The index was originally developed to measure the valuation of international currencies against the U.S. dollar. The analysis in this study examines the relationship between the price of a Big Mac and other variables such as the cost of beef, price elasticity, and income. Finally, these relationships are reviewed to draw inferences concerning the use of demand, costs, and competition in setting prices.

Scenario Planning and Evaluation of Pricing Strategies in the Portuguese Bulk LPG Market

Portugal has the largest LPG (Liquefied Petroleum Gas) share of primary energy demand in the EU (about 5%). Due to the increasing international cost of LPG in the last years and the high price sensitivity of the consumers the preference for substitute energy sources in new and existing consumers has been increasing. To select the kind of energy, some consumer estimate and compare the total costs while others follow agents (equipment sellers) recommendations. It takes time to build agents perception about the most advantageous source of energy, which is seen as an important resource that drives client resource accumulation and retention. Marketing strategies have to take into consideration some market dynamic effects derived from the accumulation and depletion of these resources. A simple system dynamics model was built, combined with Economic Value Added framework, to evaluate some pricing strategies under different scenarios of LPG international cost.

Scenario Planning and Evaluation of Pricing Strategies in the Portuguese Bulk LPG Market

Portugal has the largest LPG (Liquefied Petroleum Gas) share of primary energy demand in the EU (about 5%). Due to the increasing international cost of LPG in the last years and the high price sensitivity of the consumers the preference for substitute energy sources in new and existing consumers has been increasing. To select the kind of energy, some consumer estimate and compare the total costs while others follow agents (equipment sellers) recommendations. It takes time to build agents perception about the most advantageous source of energy, which is seen as an important resource that drives client resource accumulation and retention. Marketing strategies have to take into consideration some market dynamic effects derived from the accumulation and depletion of these resources. A simple system dynamics model was built, combined with Economic Value Added framework, to evaluate some pricing strategies under different scenarios of LPG international cost.

Indoor location-based analytics systems: Portuguese market compettive assessment and entry procing strategy of BIPs' technology in Sonae Sierra Shopping malls stores

This project attempts to provide an in-depth competitive assessment of the Portuguese indoor location-based analytics market, and to elaborate an entry-pricing strategy for Business Intelligence Positioning System (BIPS) implementation in Portuguese shopping centre stores. The role of industry forces and company’s organizational resources platform to sustain company’s competitive advantage was explored. A customer value-based pricing approach was adopted to assess BIPS value to retailers and maximize Sonae Sierra profitability. The exploratory quantitative research found that there is a market opportunity to explore every store area types with tailored proposals, and to set higher-than-tested membership fees to allow a rapid ROI, concluding there are propitious conditions for Sierra to succeed in BIPS store’s business model in Portugal.

Managing the Pricing of Integrated Solutions in Export Partnerships

Little research has been conducted to guide the management of marketing variables, such as pricing, in systems business context. Furthermore, given that international partnering has become a popular mode of operation for SMEs, the objective of the current thesis was to explore the scantly researched topic of managing the pricing of integrated solutions in an export partnership. Specifically, the thesis synthesizes literature findings from the three areas of export pricing, systems business, and export partnerships. The empirical section of the study consists of a qualitative single-case study of a Finnish systems integrator that has recently launched its export operations. Primary data was collected by conducting four interviews of the case company’s managers and by organizing one group interview session. The study findings indicate that a systems integrator’s pricing strategy in an export partnership can be very multidimensional and dependant on international pricing environment and partner characteristics, that an export partnership appears to have unique implications on a systems integrator’s pricing process, and that customer value –based pricing strategies might be particularly suited to pricing integrated solutions.

Value based pricing and marketing of marine engines

Objective of the thesis is to create a value based pricing model for marine engines and study the feasibility of implementing such model in the sales organization of a specific segment in the case company’s marine division. Different pricing strategies, concept of “value”, and how perceptions of value can be influenced through value based marketing are presented as theoretical background for the value based pricing model. Forbis and Mehta’s Economic Value to Customer (EVC) was selected as framework to create the value based pricing model for marine engines. The EVC model is based on calculating and comparing life-cycle costs of the reference product and competing products, thus showing the quantifiable value of the company’s own product compared to competition. In the applied part of the thesis, the components of the EVC model are identified for a marine diesel engine, the components are explained, and an example calculation created in Excel is presented. When examining the possibilities to implement in practice a value based pricing strategy based on the EVC model, it was found that the lack of precise information on competing products is the single biggest obstacle to use EVC exactly as presented in the literature. It was also found that sometimes necessary communication channels are missing and that there is simply a lack of interest from some clients and product end-users part to spend time on studying the life-cycle costs of the product. Information on the company’s own products is however sufficient and the sales force is capable to communicate to sufficiently high executive levels in the client organizations. Therefore it is suggested to focus on quantifying and communicating the company’s own value proposition. The dynamic nature of the business environment (variance in applications in which engines are installed, different clients, competition, end-clients etc.) means also that each project should be created its own EVC calculation. This is demanding in terms of resources needed, thus it is suggested to concentrate on selected projects and buyers, and to clients where the necessary communication channels to right levels in the customer organization are available. Finally, it should be highlighted that as literature suggests, implementing a value based pricing strategy is not possible unless the whole business approach is value based.

The Pricing of Customized Industrial Products

The main objective of this study was to examine the pricing of customized industrial products in international markets, and to understand what pricing decision making consists of. Another purpose of the study was to identify the main factors that affect the pricing decisions of industrial companies, as well as the different pricing strategies industrial companies may choose when pricing customized products. The research was conducted as a qualitative single case study, and a Finnish industrial company specializing in indoor environment solutions, Halton Marine Oy, was used as the case company in the study. The primary data was collected through semi-structured theme interviews with the key management personnel of the company, and the results were discussed and analyzed in the light of the existing literature. The results of this study indicate that the pricing of customized industrial products consists of several dimensions, and is influenced by a large variety of factors that are both internal and external to the firm. In addition, it was found that the choice of a pricing strategy is largely dependent on the chosen segment, the product category, and the stage in the product life cycle. The results also suggest that customizing companies should consider using the value-based pricing orientation, since customization is closely linked to customer value.

Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Finite Horizon Case

We analyze a finite horizon, single product, periodic review model in which pricing and production/inventory decisions are made simultaneously. Demands in different periods are random variables that are independent of each other and their distributions depend on the product price. Pricing and ordering decisions are made at the beginning of each period and all shortages are backlogged. Ordering cost includes both a fixed cost and a variable cost proportional to the amount ordered. The objective is to find an inventory policy and a pricing strategy maximizing expected profit over the finite horizon. We show that when the demand model is additive, the profit-to-go functions are k-concave and hence an (s,S,p) policy is optimal. In such a policy, the period inventory is managed based on the classical (s,S) policy and price is determined based on the inventory position at the beginning of each period. For more general demand functions, i.e., multiplicative plus additive functions, we demonstrate that the profit-to-go function is not necessarily k-concave and an (s,S,p) policy is not necessarily optimal. We introduce a new concept, the symmetric k-concave functions and apply it to provide a characterization of the optimal policy.

Chain-store pricing and the structure of retail markets

This paper examines competition between chain-stores and independent retailers in the UK retail opticians' market. We demonstrate that the pricing policy adopted by chain-stores can determine the impact their entry has on independent retailers. Crucially, in this market the chain-store retailers set an identical national price across all local markets. Our results suggest that this pricing strategy lessens the detrimental effect competition from chain-stores has on independent retailers. © 2014 Springer Science+Business Media New York.

Strategic marketing plan for Sant'Anna

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

The influence of price changes on consumers' purchase decisions

The development of an effective pricing strategy requires the acquaintance of consumers’ price perception as well as the range of elements that influence the price sensitivity. This paper analyses the relationships between product features, individual characteristics and the level of price increase/decrease that induces the consumers to change their purchase decisions. The results of a dedicated survey show, that price sensitivity, individual preferences, type of product and direction of price change and individual characteristics of consumers (gender, age, professional situation) have a significant impact on a threshold at which people are willing to choose the less attractive, but cheaper alternative to their favorite product or give up the variety in consumption. From a consumer behavior perspective, these findings play a fundamental role in pricing.

Growth hacking model for B2B saas startups

The following project introduces a model of Growth Hacking strategies for business-tobusiness Software-as-a-Service startups that was developed in collaboration with and applied to a Portuguese startup called Liquid. The work addresses digital marketing channels such as content marketing, email marketing, social marketing and selling. Further, the company’s product, pricing strategy, partnerships and website communication are examined. Applying best case practices, competitor benchmarks and interview insights from numerous industry influencers and experts, areas for improvement are deduced and procedures for each of those channels recommended.

Hinnoittelustrategian kehittäminen suoramyyntiyrityksessä

Työn tavoitteena oli kehittää kosmetiikan suoramyyntiyrityksen hinnoittelustrategiaa. Tarkoitus oli saattaa normaalihinnat oikealle tasolle määritellyn kilpailuaseman mukaan. Työn etenemisen myötä huomattiin tarvetta myös koko hinnoitteluprosessin uudelleenluomiselle, sillä aikaisempi toimintatapa ei toiminut enää nykyisessä tilanteessa konsernin tiukkojen raportointitarpeiden ja esitteiden analyysin tukena tarvittavissa määrin. Aluksi tutustuttiin hinnoitteluun vaikuttaviin tekijöihin ja eri hintastrategisiin vaihtoehtoihin sekä hinnan rooliin markkinoinnin kilpailukeinona. Työssä tutustuttiin lisäksi suoramyyntitavan ominaispiirteisiin. Teorian pohjalta selkiytettiin Oriflame Finland Oy:n hinnoittelustrategia jalaadittiin pohjat tuotekohtaiselle ja myyntijaksottaiselle hinnoittelulle. Hinnoittelupohjan tuli tukea myös yrityksen talousosastoa ja olla hyödyllinen raportointityökalu myyntiennusteita varten. Erityisesti uusi hinnoittelumalli tehtiin tukemaan yrityksen päämyyntivälineen eli jaksottaisen myyntiesitteen analysoimista. Hinnoittelu on keskeisessä osassa koko yritysstrategiassa, sillä se vaikuttaa suoraan mielikuviin. Hinnoittelun tulee jatkossa tukea enemmän yrityksen kilpailullisia ja markkinoinnillisia tavoitteita, ja sen säännöllinen kehittäminen ja kilpailutilanteen päivitys kuuluu jatkossa yhtenä määriteltynä osana hinnoitteluprosessiin.

Managing Customer Retention in Health and Fitness Club Industry

The objective of this study is to resolve how customer retention is managed in Finnish health and fitness clubs, and how is this comparable with the theoretical aspects of customer retention. It is also discussed how the process leading to customer retention is handled, and what the essential elements of customer retention and loyalty are specifically in the health and fitness club industry. In addition, it is discussed to what extent do health and fitness club companies implement the elements of customer retention in their businesses. Finally, there is discussion about the relationship and priority between the behavioral and attitudinal methods of creating retention in the companies. The data was collected by interviewing the management of six health and fitness clubs from different geographical regions in Finland. Results indicated that the most important constructs concerning customer retention were switching barriers, pricing strategy, competitive aspect, corporate image, service quality, employee retention, and customer satisfaction. In addition, the implementation of customer retention was found to vary between different sized companies and companies from different geographical locations. Moreover, it was discovered that the companies put more effort in constructs that are considered to create customer loyalty instead of retention.