Crafting service-based go-to-market and pricing strategies for a new technology

Abstract

Purpose The purpose of this thesis is to shed light on how different bundling, service and pricing strategies affect the customer’s willingness to pay and purchase intention of a service related to a new technology and its product-related services. Design/Methodology This thesis is an exploratory qualitative case study. Data was collected via expert interviews with customers and relevant managers in a large multinational company based in Switzerland. Data coding was carried out by Mayring’s Qualitative Content Analysis. Findings Different bundling, service and pricing strategies have a great influence on the customers’ purchase intention and willingness to pay. Customers are reluctant to contract simple non-value added services, which leads to a lower purchase intention when products are bundled together with this kind of services. The use of performance based contracting in go-to-market strategies has a significantly positive impact in the customers’ willingness to pay. Offering IoT based, advanced value added services increases not only the willingness to pay but also the purchase intention. However, manufacturers need to undertake important changes in their sales and R&D processes in order to reach a successful and efficient service deployment. Providers must integrate services in the product’s design phase and change their sales approach in order to focus on gathering data by understanding the client’s needs and learning about the customers’ processes. This will enable the manufacturer to successfully offer customized services that will lock-in customers to long term relationships. Research limitations The study is exploratory, which means that it did not quantitatively measure the results. In addition, the study focused only on one company, which makes it difficult to generalize the findings.