Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

A pricing approach for service companies: service blueprint as a tool of demand-based pricing

A pricing approach for service companies: service blueprint as a tool of demand-based pricing Purpose – Demand-based pricing fixes price according to customers’ perceptions of service value and to their resulting willingness to pay. This pricing approach enables service companies to align their prices to customers’ preferences and to their expenditure propensity. Accordingly, it can generate higher margins than other pricing approaches. Nevertheless, this approach is difficult to implement operationally. Consequently, in order to overcome these implementation difficulties, the purpose of this paper is to provide a demand-based pricing approach based on the user-friendly technique of service blueprint (SB). Design/methodology/approach – The methodology relies on the design science leads. Design science deals with creating artefacts or models for supporting human or organizational purposes; such artefacts have to be assessed against criteria of utility or value for users. Accordingly, an experimental action research is performed for both implementing and testing the proposed pricing approach. Findings – Starting from the main difficulties hindering implementation of demand-based pricing, SB is proved to enable companies to overcome such difficulties and to support its implementation. Moreover, by employing SB, an innovative approach for fixing service prices is provided. Practical implications – The proposed approach enables managers of service companies to overcome difficulties of demand-based pricing and to employ pricing strategies according to demand-based drivers. Originality/value – In line with a recent call for research on service pricing, this paper develops a new pricing approach, which is able to promote demand-based pricing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Business Process Management Journal Emerald Publishing

A pricing approach for service companies: service blueprint as a tool of demand-based pricing

Download PDF
16 pages

Loading next page...
 
/lp/emerald-publishing/a-pricing-approach-for-service-companies-service-blueprint-as-a-tool-9XU4Cg3SAE
Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1463-7154
DOI
10.1108/BPMJ-07-2013-0087
Publisher site
See Article on Publisher Site

Abstract

Purpose – Demand-based pricing fixes price according to customers’ perceptions of service value and to their resulting willingness to pay. This pricing approach enables service companies to align their prices to customers’ preferences and to their expenditure propensity. Accordingly, it can generate higher margins than other pricing approaches. Nevertheless, this approach is difficult to implement operationally. Consequently, in order to overcome these implementation difficulties, the purpose of this paper is to provide a demand-based pricing approach based on the user-friendly technique of service blueprint (SB). Design/methodology/approach – The methodology relies on the design science leads. Design science deals with creating artefacts or models for supporting human or organizational purposes; such artefacts have to be assessed against criteria of utility or value for users. Accordingly, an experimental action research is performed for both implementing and testing the proposed pricing approach. Findings – Starting from the main difficulties hindering implementation of demand-based pricing, SB is proved to enable companies to overcome such difficulties and to support its implementation. Moreover, by employing SB, an innovative approach for fixing service prices is provided. Practical implications – The proposed approach enables managers of service companies to overcome difficulties of demand-based pricing and to employ pricing strategies according to demand-based drivers. Originality/value – In line with a recent call for research on service pricing, this paper develops a new pricing approach, which is able to promote demand-based pricing.

Journal

Business Process Management Journal – Emerald Publishing

Published: Oct 28, 2014

There are no references for this article.