Premium B2B services on a price sensitive market - A Case Study of a Swedish B2B Service Company in India

Abstract: Title: Premium B2B services on a price sensitive market - a case study of a Swedish B2B service company in India. Authors: Emma Staxäng and Erik Almén Tutors: Andreas Larsson - PhD, Department of Design Sciences, Faculty of Engineering, Lund University Fredrik Häglund - PhD Student, Business Administration, School of Economics and Management, Lund University. Helene Hjelmvik - Managing Director, Bombayworks Pvt. Ltd. Issue of study: Bombayworks is a Swedish web development company, whose Indian market entry will be the point of analysis of this master thesis. Many issues arise with market entry and the most prevalent ones in this case are the lack of a formalized business model and pricing strategy. One corner stone in pricing, perhaps the most important one, is value. Many have argued that the actual value of an offering is seldom the same thing as the perceived value for the buyer. This leaves companies, such as Bombayworks, with the choice of either adjust their prices to match the buyers’ perception or to try to alter the clients’ perception. The situation is even more challenging for Bombayworks, since one has no formalized business model and aims to enter a cost sensitive market. Purpose: The purpose of this master thesis is to map the business model of a premium B2B service company in India, to identify factors that affect the pricing strategy. Method: An explorative case study has been conducted on Bombayworks, a digital agency with operations in Sweden and India. The company´s business model in India has been mapped through a two-month observation study and the use of the Business Model Canvas. Several external parties have also been interviewed, to get a deep understanding of the conditions that applied on the Indian market. The data components were then merged with established theoretical concepts, in order to complete the purpose of the study. Conclusions: The findings of the study were inconclusive. However, several indicators were found that indicated that it would be possible for the case company to charge a premium price. The primary indicator is mainly connected to the service knowledge level of the potential customer. If the customers had a high knowledge of the service, they were more willing to pay a premium price. Key Words: Web Design, Case Study, B2B Services, Business Modeling, Pricing, Value, Value Perception