Performance-based pricing of integrated solutions
(English)Manuscript (preprint) (Other academic)
As manufacturing fmns are moving towards integrated solutions, they may find themselves in need of new capabilities. Developing and maintainutg these is expensive and for the supplier, innovative pricing models are needed to cover these excess costs. Although pricing of integrated solutions can be designed in various ways, performance-based pricing remains one of the most effective ways to create an incentive for optimal performance, and also to cover the 'hidden' cost of developing capabilities. The paper maps some performance-based pricing models as has been found in two case studies of manufacturing firms. Furthermore, an investigation of how the design of these pricing models is affected by different contextual factors is also carried out. The results show that viable performance-bases are availability of supplied function or the change of profitability for the customer.
Integrated solutions, performance-based pricing, business offering
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-102029OAI: oai:DiVA.org:liu-102029DiVA: diva2:667680