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Case Study

Kalmar's big data pricing dilemma

By Goutam N. Challagalla, Lisa Simone Duke and Jennie Zeiner

16 pages

September 2017

Reference: IMD-7-1856

This case follows a multidisciplinary team at Kalmar, a business unit of Cargotec, to develop a new product based on telematics and then the challenge of how to price the product/service for value in the context of customers who would not typically pay for such a thing. The Kalmar team had been thrown a somewhat ambiguous challenge with a tight timeframe of a mere ten weeks. Through customer-site visits including observation and discussions, the team had come up with a unique digital offering for cargo handling port terminals that could potentially deliver real value for customers and help Kalmar differentiate itself from competitors. As the team formulated plans for a pilot, some key questions remained, in particular, how to structure a price for the service? Kalmar Insight could help customers improve operational efficiency and profitability but how could Kalmar put a price tag on this value? The case looks at the different options open to Kalmar.

Learning Objective

This case illustrates to students how observation of customers and conversations about their needs can lead to innovative ideas leveraging off digital technology.
It also illustrates a value based pricing approach to how to price a new innovation in an segment where the value has previously not be quanitified nor explored.

Keywords

Value-based Pricing, Pricing, Model, Innovation, Customer Insight, Digital Transformation, Digitalization

Settings

World/global
Kalmar, Logistics and Supply Chain, Shipping
2016

Type

Field Research

Available Languages

English

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