Pricing Management at Alfa Laval Equipment Division

University essay from Lunds universitet/Produktionsekonomi

Abstract: Research questions: What factors should be considered when setting a price of a new Plate Heat Exchanger, PHE? With these factors in mind, how should a logical pricing model be created and what kind of measurable data should be used to find logical relations? Deliverables: The main focus has been towards creating a logical pricing model for new PHEs. Furthermore, the projects purpose has been to issue a status report of how the RCPL-strategy1 is implemented in different geographical locations, a benchmark of other Swedish export companies and last to verify the applicability of the logical pricing model. Methodology: In the first phase of our project we tried to collect as much primary and secondary data as possible. We read a lot of different literature, conducted several interviews at Alfa Laval and sent out a questionnaire together with a discount survey to different sales companies around the world. In the second phase of our project we focused on creating a logical pricing model. In order to do this we had to begin by collecting information to a database. We collected prices from an Alfa Laval sales system and product data by using product data sheets. Furthermore, the results from the questionnaire and discount survey was put together and analyzed. In the third phase of the project most of the time was spent to configure and optimize the database. After the database was configured we verified the applicability of the logical pricing model by comparing prices from the model with prices from the sales tool. Conclusions: By analyzing the data from the questionnaire and the discount survey it can be determined that the RCPL-strategy has been reasonably well implemented. However, there is a need to improve the communication between the sales companies and the central organization. There is also a need to specify the sales data in order to get a better understanding of the customer. By testing the logical pricing model that has been created it can be determined that the model is applicable and can be used as guidance when setting an RCPL-price of new PHEs. There are other factors that are not included in the logical pricing model but still need to be considered. Some of these factors can be viewed in an Ishikawa diagram which is thought to work as further guidance when an RCPL-price is set, see appendix V.

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