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Case Study

Thomas & Betts: The value-based pricing decision

By Winter Nie, Goutam Challagalla and David Gray

7 pages

June 2016

Reference: IMD-7-1798

The case examines the decision facing T&B product managers in pricing an innovative new product. The product, a medium-voltage ‘spiking aid,’ reduces the need for utilities to cut power cables prior to performing repair and maintenance work on underground electrical distribution systems, leading to significant labor cost and material savings and other benefits. The case enables readers to estimate the economic value to customers of the new product relative to existing options and supports a discussion of other factors involved in pricing decisions. It also provides context on T&B’s efforts to build a strategic capability around value-pricing and pricing discipline.

Learning Objective

Explore strategic issues in pricing an innovative new product and calculate the economic value to the customer of the new offering relative to competitive reference products.

Keywords

Marketing, Innovation, Electrical Components, Electrical Equipment, Manufacturing, Product Management, Value-based Pricing, Pricing Strategy

Settings

Northern America, United States of America
Thomas and Betts, Manufacturing, Electric and Electronic Equipment
2010-2016

Type

Field Research

Available Languages

English

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