EXECUTIVE SUMMARY

This project is about the FluidSim software from Festo Didactic. The software simulates pneumatic, hydraulic, and electronic circuits​ and is used for system performance optimization. The product is mostly used by educational institutions and the engineering workforce and contributes roughly 3% to Festo´s turnover. During the project, the team worked on a sustainable pricing strategy for migrating the software from a one-time payment to a subscription-based model, as well as a strategy to enter the U.S. market.

Goal

The project partner introduced the team to two exciting challenges they are currently facing with their simulation software FluidSim. To begin with, the company wants to switch the pricing strategy from a one-time payment to a subscription-based pricing model. To make this transition as efficient as possible the first goal was to identify the needs of existing customers, define the strengths of the new pricing model and develop a concrete migration strategy. In addition, the company is about to enter a new and promising market with the software. Therefore, it was crucial to get an overview of the competitive landscape in the new market and develop a concrete acquisition strategy to diffuse the product.

Methodology

To tackle the objectives of this project, the team used a variety of different methods. Firstly, the team analyzed how companies in analogous markets designed the switch of their pricing model. In an extensive competitor analysis, the team identified best practices and obstacles companies faced in the past. Additionally, a competitor analysis was conducted to understand who Festo is competing with and what they offer to their customers. These results where then complemented with interviews with experts from different companies and institutions. To obtain an accurate estimate of the market size of the new target market the TAM-SAM-SOM framework was used. Lastly the team conducted a SEO analysis on the landing page of Festo´s software and conducted research on additional sales channels with suggestions of concrete strategic partners.

Results

The results of this project were comprehensive strategies to switch the pricing strategy of the software and to enter the new market. The team evaluated all the results from the different research methods and merged them into two concrete strategies. One step-by-step strategy on how to migrate existing customers to the new pricing model and another strategy to diffuse the product effectively in the new market. The final report also included recommendations for optimizations of the company’s website and possible sales channels. With the results from the TAM-SAM-SOM analysis, the team was able to deliver an accurate forecast of numbers Festo can expect, while entering the new market.

Cooperation Partner

• Festo Didactic SE
  Rechbergstraße 3., 73770 Denkendorf, Germany

• https://www.festo.com/de/de/e/technische-bildung-id_3776/ 

Contact Person

• Tobias Storz - tobias.storz@festo.com

Student Team

• Michael Knotz

• David Rass

• Raffael Proft

• Moritz Spadinger

• Severin Österreicher

Project Manager

• Caroline Fabian, M.Sc.

• Shtefi Mladenovska, M.Sc.