Improper pricing policy in Tan Sanh company

Abstract

This assignment focuses on Tan Sanh Company, a private enterprise whose primary business is providing gondola construction equipment for projects in Ho Chi Minh City. From 2019 to 2022, the company has witnessed decreasing revenues from leasing gondolas to "glazing customers." Through mainly qualitative research methods and data collected through interviews and literature review, the main problem identified was improper pricing policy. Then, two potential causes are discovered, including failure to establish a process for setting the price and poor price-setting methods. These were then validated using a theory-based approach and inside company information, and the results revealed the root cause of poor price-setting methods. Accordingly, two alternative solutions were designed based on two popular pricing methods: break-even pricing and customer value-based pricing. Based on the company's requirements and conditions, break-even pricing was selected for implementation. A detailed action plan has also been developed for this solution.