Pricing methods for new product concepts in the digital environment: Case digital talking books in mobile networks

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Helsinki University of Technology | Master's thesis
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P1 Ark Aalto

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Date

2002

Department

Tuotantotalouden osasto

Major/Subject

Teollisuustalous

Mcode

TU-22

Degree programme

Language

en

Pages

v + 90

Series

Abstract

The purpose of this study is to present central issues in the pricing of a new service, and to test and analyse how the chosen marketing research methods are suited for the pricing explorations of digital products. A potential pricing model is also developed for the product scenario of the case. In the theoretical part of the thesis, the main theories and concepts of new product pricing are discussed. In addition short summaries of new product development, segmentation, and diffusion of innovations are presented. The empirical part of the study focuses on the pricing of digital talking books. Personal interviews were conducted to find out the users' needs and wants. Adaptive conjoint analysis was used to define the product concept. Willingness-to-pay and price sensitivity were studied through direct questioning via a www-survey. As background information, concise overviews of Finnish book publishing industry and current technological development are presented. It was found out that the quality of talking books and the availability of extra-information were experienced as the most important features whereas the language and product's rights were not so important. Based on the responses of the www-survey (208 responses), the mean maximum price of one talking book was almost 16 euros and the price elasticity of the demand around 1,7. The active users of current talking books were willing to pay more for talking books than those who did not have any experience in them. Women also had a greater mean of the maximum price compared to men. The used methods provided rough direction for pricing decisions. However, it became clear that more advanced methods would produce more reliable results. The use of a demo and choice-based conjoint analysis where pricing is one of the studied features would probably result in more valuable findings.

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Supervisor

Eloranta, Eero

Thesis advisor

Kemppinen, Jukka

Keywords

pricing, new product concept, digital products, talking books

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-2020120449217

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[dipl] Teknillinen korkeakoulu / TKK