The role of pricing strategy in customer engagement

Abstract

This master's dissertation investigates the role of pricing strategy in shaping customer engagement within the Algerian ride-hailing sector, using Heetch El Djazair as an empirical case study. In a hyper-competitive digital marketplace characterized by extreme price sensitivity, low switching costs, and widespread multi-homing behavior, pricing has transcended its traditional marketing mix function to become the primary lever of cognitive, emotional, and behavioral consumer engagement. Grounded in a sequential mixed-methods design, this research first conducted an exploratory qualitative study through semi-structured interviews with four key operational managers at Heetch El Djazair — an Operations Business Analyst, a Competitor Monitoring Specialist, a Customer Care Officer, and a CRM Marketing Expert — to decode the platform's internal yield management mechanisms. The qualitative phase revealed that Heetch calibrates its fares through a systematic real-time feedback loop anchored in three consumer-facing dimensions: comparative competitiveness, economic accessibility, and pricing transparency and fairness. These three dimensions were subsequently operationalized into a quantitative survey administered to 162 Algerian ride-hailing users. Multiple linear regression analysis via SPSS yielded an exceptionally robust explanatory model (R² = 0.921, F = 612.78, p < 0.001), confirming all three hypotheses: Comparative Competitiveness emerged as the dominant predictor (β = 0.430), followed by Economic Accessibility (β = 0.283) and Transparency and Fairness (β = 0.247). Together, these dimensions account for 92.1% of the variance in customer engagement. These findings establish that in the Algerian VTC market, price perception is a multidimensional construct that decisively governs consumer loyalty and platform attachment. This dissertation concludes with actionable strategic recommendations, proposing that Heetch transition from reactive manual pricing checks toward automated, API-driven competitive intelligence systems, implement transparent fare-breakdown interfaces, and deploy CRM-based precision promotional strategies to sustainably convert price-sensitive users into deeply engaged brand advocates.