Price Strategy for Product Launch : from the Customer Value Perspective

Abstract: Title:Price Strategy for Product Launch – from the Customer Value Perspective Seminar date:29th August 2011Course:Master thesis in Fashion ManagementCredits:15 ECTSAuthor:Sandra Yin-Kwan KoTutor: Lisbeth Svengren HolmBackground:Fristads has noticed needs and necessity of high visibility work wear in the market, particular for the high risk working industries. In addition to it, new international standards for work wear will be introduced in year 2013 which may put higher requirements on visibility of the work wear. Fristads aims to be the first company to develop the new product and pricing is one of the major problems they encounter. After studying different relevant literatures, we have decided to approach the pricing problem using customer value based pricing as the starting-point.Purpose:To identify and analyse the pricing with focus on customer values and product launch. Methodology:My research methodology has a qualitative approach with a certain quantitative feature, and it follows the inductive reasoning. Uncontrolled studies of preferences and intentions have been used when three dealers and one end-customer were interviewed. Secondary sources have been reviewed and the critical pricing issues are identified. The primary data obtained from the interviews is made as foundation for the creation of the price strategy.Result:The interviews have shown that the customers like Fristads’ product idea and the design of the work wear with enhanced visibility. A probably accepted price on the new work wear has been defined according to the customer survey. Pricing strategies for the product launch focusing on the customer value have been recommended. The final decision on the price strategy shall however be made in concurrence with the other strategies at Fristads in order to cover all the aspects.