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Value-based Pricing instead of Cost-based Pricing: Flixtrain and the track prices of Deutsche Bahn
The CEO of Flixtrain, André Schwämmlein, has to pay a fee for the use of the tracks of DB subsidiary DB Netz if he wants to use the DB rail network with his trains. This is understandable, but the governing parties are debating whether to charge Flixtrain full costs or marginal costs.
Flixtrain – Cost based Pricing is complex in cost determination
“From business studies, we know that there are sensible alternatives to Cost based Pricing (Pricing-Newsletter No. 9: Why cost-oriented pricing is dangerous), especially since the causative determination of costs for each individual rail kilometer is likely to be complex”, says pricing expert Dr. Hans-Christian Riekhof, Professor of International Marketing at the Private University of Göttingen (PFH). A promising approach could be to determine the prices for certain tracks or better routes according to the value that arises when used by the customer.” This approach is called Value based Pricing (Pricing-Newsletter No. 9).
For Flixtrain, value-oriented pricing is a viable alternative
A high-speed ICE route between two metropolises generates a higher value than the connection between two rather insignificant small towns, completely independent of the costs of the track. Thinking about contemporary variants of pricing would perhaps be a good recommendation, says Riekhof.
Photo: pixabay.com
Internet World Business reports on Location based Marketing, Instore Navigation and locandis
The digital trends specialized magazine “Internet World Business” now focuses on stationary trade and its increasing digitization. The magazine reports on topics such as Instore Navigation, Location based Marketing and the company locandis specialized in this. locandis-CEO Hans-Christian Riekhof comments on the successful Instore-Navigation project for a hardware store.
Location based Couponing, digital customer cards, Location based Marketing
Shopping behavior has not only changed since the establishment of e-commerce. From specialized retailers to large department stores, from outlets to huge shopping malls on the green field, the industry has been in constant motion for over 200 years.
Currently, the magazine writes, the digitization of the stationary Point of Sale (POS) is the next driver of development. Especially thanks to the smartphone and its technical possibilities. This now allows a link between classic and online retail to be realized. Customers can thus be offered new and better on-site shopping experiences. In addition to Instore Navigation, Digital Shop Windows, Virtual Fitting for digital trying on of outfits, new payment processes such as Self-Checkouts at store checkouts are mentioned. Also further possibilities like additional product information via smartphone, upselling offers etc.
Hagebaumarkt – How locandis enables better orientation in the hardware store with Beacons
Technologies like Beacons and QR codes do great things. The smartphone is the game changer, the magazine states. It shows examples of already successfully implemented digital concepts in stationary retail.
Hans-Christian Riekhof was also interviewed, who as CEO co-manages the fortunes of locandis. A Hamburg-based company that specializes in such digital technologies. He gives insight into the successful Instore-Navigation project for a Hagebaumarkt. With Beacon technology, customers of the hardware store are conveniently guided to their searched products via app.
Further links
The article in the “Internet World Business” (pdf)
Website of the company locandis
More about Location-based Marketing (LbM)
The magazine
The “Internet World Business” is a monthly B2B trade magazine based in Ulm and Munich. It is aimed at readers with a connection to digital trade. The main topics are e-commerce, online marketing, webshop systems, online payment processing, logistics, social media marketing, studies and trends around the internet, internet law and reports from the internet economy.