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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
