Profitable pricing is the harvest of firm's efforts to create value for its customers. Indeed, it is the only element of the marketing mix that produces revenue; all other elements represent costs. Consequently, setting prices is a critical managerial decision. For both strategic and tactical reasons, managers change prices more often than any other element of the marketing mix. It is reported that managers also often make mistakes in their pricing decisions: Pricing is too cost-oriented, pricing decision did not consider likely consumer response, pricing decision failed to anticipate competitive reaction, new price encourages cannibalization of existing product line, pricing is not consistent with product position, pricing is not responsive to market changes. Knowledge of pricing is useful for those pursuing careers in marketing, and financial management.
This course covers fundamental analytic tools, theories, and conceptual tools for formulating pricing strategy. The course also covers pricing tactics, and some new economy pricing models.
1. To familiarize you with the theories and conceptual tools required for setting prices.
2. To provide an opportunity to apply your understanding of concepts to solve business problems.
This course builds on Marketing 360 and Managerial Economics 300.
Customer Sensitivity to Price
Psychology of Pricing
Understanding Competitive Advantages, and Competitive Reaction
Auctions and Reverse Auctions
The course will be taught using a variety of methods, including lectures, case discussions and problem sets.