This course is appropriate for anyone who expects to be involved in the determination, execution and communication of a price. This includes students who plan careers in general management, marketing, sales, strategy, and customer services. The course is not restricted to any particular industry or vertical, and is appropriate for both B-2-B and B-2-C, and for both products and services applications.
After taking this course, you will be able to:
1) Understand the importance of the demand curve and customer willingness-to-pay in pricing strategy, and learn methods of estimating the demand curve.
2) Learn how to calculate profit-maximizing prices.
3) Calculate expected value to customers (EVC) and develop the concept of value based pricing.
4) Understand relevant costs in determining prices, and develop a cost-based framework for pricing.
5) Understand the effect of non-price factors on price image and perceived value.
6) Be sensitive to consumer behavior factors that play a large role in pricing effectiveness
7) Analyze a distribution channel in terms of impact of margin changes on channel value
8) Understand innovative pricing strategies like bundling and price customization.
Price setting is one of the most important marketing mix decisions. It involves an understanding of both supply side factors (e.g. costs) and demand side factors (e.g. consumer willingness to pay). While traditional approaches to pricing theory have revolved around an economic and financial framework, a broader and more pragmatic view entails a comprehensive understanding of the demand side, both at the level of individual customer values, and the more aggregate level of price sensitivities of the market. Using product categories as diverse as financial services, healthcare, industrial products and consumer packaged goods, we will study economic and behavioural approaches to pricing, value pricing, price customization, price bundling and multi-part tariffs, revenue management, and retail pricing strategies, amongst other topics.