University of Twente Student Theses


Rapid Prototyping-as-a-Service : Pricing Strategies in Industrial Markets

Kooistra, Maxime (2021) Rapid Prototyping-as-a-Service : Pricing Strategies in Industrial Markets.

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Abstract:Aim of study: The aim of this study is to come up with a pricing strategy for different customer segments that is suitable for Rapid Prototyping (RP) for the company Special Casting Components Ltd (SCC). As a technology, RP can be used to rapidly produce products to improve the design, engineering and series production process and thereby to reduce costs. The popularity of RP techniques is growing rapidly but many manufacturers offer it to ensure that they sell machines and components. This way of thinking does not do justice to the value RP offers to the firm and the customers. Therefore, it is of importance to investigate what prices can be asked and what the associated customer value is for RP as a service offered next to other business offerings. This research aims to facilitate insights for a possible value-based pricing (VBP) strategy for SCC’s RP, and is of practical relevance for other manufacturing companies to position RP and related technology in a rightful and valuable way to their customers. Methodology: The research design of this thesis is a combination of academic literature and qualitative exploratory research. Firstly, backgrounds of RP techniques are studied and VBP theories with associated aspects are discussed. Moreover, to define the customer value related to RP, an analysis is conducted based on the influence of new technologies, value-in-use and habits in the market. This analysis is the first step of a defined VBP framework that later is used to implement a VBP strategy for SCC. Secondly, a multiple case study is executed using SCC’s customers in different markets. These customer industries reflect a variety of customer values and as a consequence might need a different VBP approach. Data from SCC’s customers is collected by interviews. Additionally, information is collected from SCC’s sales and management team to get insights in current pricing of RP and to compare whether SCC is responding to customer values in the right way. All this data is used in the VBP framework to assess SCC’s current RP pricing and to implement a VBP strategy for RP. Results: This research has identified distinctive value propositions for different customer segments based on their customer values. Besides this, different strategies are formulated for RP based on value-in-use, habits in the market, alternative techniques for RP and the influences of new technologies. At the start of this research, two value propositions related to RP were identified: Rapid Prototyping-as-a-Service (RPaaS) and Rapid Prototyping-as-a-Product (RPaaP). Based on the results from this research, it is advised to reframe these value propositions from ‘inside-out solution focused’ to an ‘outside-in promise of a result’, by emphasizing that SCC is the partner of choice if a customer wants an optimized series design which results in the lowest TCO. Based on that insight, the advised VBP strategy for RP is to embed it in a broader ‘Optimization-as-a-Service’ proposition, highlighting the value of lost wax casting as a technique and the differentiating value offered by SCC as a leading supplier. In this way RP contributes to SCC’s core business.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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