Pricing Methods in Digital Multi-Sided Platforms with a Delivery Service - Evidence from a case company
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School of Business |
Master's thesis
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en
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89+1
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Abstract
Digital platforms and their success stories during the last twenty plus years have yielded questions on how such corporate fairytales come into existence. One of the critical decisions when building a successful digital platform is pricing. Pricing in digital platforms has been studied by a number of different scholars. The pricing models presented in academic literature vary from qualitative to very quantitative. Pricing models can be a listing of decisions or a mathematical model to determine the optimal price points for a digital platform. The research questions for this study are: How do digital platform companies with a delivery service determine correct price points for their service? Can a digital platform with a delivery service make accurate pricing decisions based on a qualitative model? In this study, I research pricing methods in digital platform companies, with an emphasis on companies with a delivery service. The case company in this study is a European three-sided digital platform with a delivery service. The evidence from the case company contributes to this study greatly, by providing an example from a real-life pricing model. I am able to present their pricing procedure in detail in this study. The goal of the study is to present pricing models from existing academic literature. The pricing models presented in this study are qualitative and quantitative. I compare the academic pricing models to the one in case company. The contribution of this thesis is to examine and present pricing models of digital delivery platforms. This study presents a unique finding in the context of pricing models for digital platform with a delivery service. There is evidence for the correctness of the case company’s pricing model with comparable results from another model, and evidence on how the model has performed historically. The method of the study is qualitative, and interview based. The most important finding of this study is the case company’s unique method of data collection for their pricing procedure. This finding sets it apart from existing models in the field. The restrictions of the study are related to the generalization of the case company’s pricing model and the potential misrepresentation of corporate specific pricing models in academic literature.Description
Thesis advisor
Malo, PekkaPenttinen, Esko