Designing Management Control System to Support Pricing Process Harmonization: A Case Study
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School of Business |
Master's thesis
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Date
2018
Department
Major/Subject
Mcode
Degree programme
Accounting
Language
en
Pages
84+6
Series
Abstract
According to various studies, pricing is the most important profitability lever. Despite of this, academics and professionals have been showing limited interest into the field of pricing. During the last three decades, the emergence of Interned based market platforms (E-commerce) has increased the price transparency. This combined with the constantly tightening competition and product commoditization has driven the accelerating price erosion in various markets. These changes have mainly affected the B2C consumer industries, but are now emerging in the more traditional B2B industrial markets as well. Due to the transformation of external environment, many companies have started to pay more attention into their pricing practices. The goal has been to mitigate the negative effects and to generally improve the pricing performance. In practice, this means that companies are implementing more systematic processes and tools into their pricing processes. Especially, managing and controlling the discounting policies is essential for obtaining consistent prices and to increase the profitability. Marketing scholars have primarily focused on the pricing strategy research. Less effort has been paid to the pricing strategy implementation. Hence, they provide limited number of tools for pricing performance optimization. As solutions, management accounting literature offers management control systems. These controls have mainly been thought as tools for strategy implementation and performance management. Thus, they provide a suitable framework for solving various pricing related challenges and to improve the general pricing performance. This thesis is a normative case study that seeks to improve the pricing process of a multinational industrial company. The company is facing the price pressures brought by the E-commerce and tightening competition. The goal is to design a management control system, which can aid the company to achieve consistent prices in different sales channels. The most important motivation is to increase or at least to retain the profitability.Description
Thesis advisor
Malmi, TeemuKeywords
pricing, management control systems, pricing management, customer profitability