Spare Parts Pricing; Setting the right prices for sustainable profit at Atlet

Author/s: Magnus Cullbrand & Linnéa Levén
Language: English
University: Chalmers Universitet, Sweden

https://publications.lib.chalmers.se/records/fulltext/159186.pdf

Abstract: This master thesis deals with pricing of spare parts. Spare part pricing is the
combination of the research field of pricing with the characteristics of spare parts. The volume of the spare parts is vast compare to the primary products. Spare parts usually stand for a minor part of the sales but a large part of the company’s profit. Price has a great leverage on profit compared to an increase in sales volume or cost cutting. Therefore, the profit potential of spare parts pricing is substantial.

Moreover, a consistent pricing logic can decrease the amount of customer complaints, and increase the customer satisfaction and loyalty. A company that has identified this profit potential is the forklift manufacturer Atlet. Atlet Part Logistic (APL) is the department responsible for spare part activities and is investigating the possibilities to improve the spare part pricing.
In order to do this three main research areas have been identified: pricing strategies, pricing methodologies and pricing tools.

The purpose of this master thesis was to propose an applicable pricing strategy
for APL and to identify methods and pricing tools supporting this strategy.