Management > Marketing > Pricing

Pricing posted by duggu on 12/9/2007

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Abstract/Syllabus

Courseware/Lectures

Test/Tutorials

Course Highlights

This course features case studies and questions for discussion in the lecture notes section, and group assignments.

Course Description

This course, primarily discussion based, provides a framework for understanding pricing strategies and tactics. Topics covered include pricing in competitive markets, estimating demand, price discrimination, the role of price cues, anticipating competitive responses, pricing in business to business markets, and pricing of new products. Lectures and cases are the primary modes of learning.

Syllabus

Nature and Purpose of the Course

The goal of this course is to ensure that students can navigate the complex issues surrounding setting the most profitable long term price for a good or service.

Ultimately, upon completion of this course, students will

Master a state-of-the-art framework for analyzing pricing issues
Be familiar with essential techniques for making profitable pricing decisions

Evaluation of Work - Approximate Weightings

Grading criteria.
ACTIVITIES	PERCENTAGES
Class Participation	24%
Three Group Case Reports	36%
Two Individual Exercises	40%

Organization of Course

Each week we have a theory class followed by a case discussion. The case is designed to reinforce that week's lecture, but will also build on the insights of previous lectures.

Pre-Requisites

All students should have had 15.010 / 15.011 or an equivalent course in microeconomics and should be comfortable with analytical material.

Ethics

An important concern in any discipline is the ethics of its practitioners. This is certainly true in marketing and advertising. Ethical issues will arise in the case discussions. Indeed, some managers in the cases act in ways you might not consider ethical. These actions are left in the case specifically to raise ethical issues. We encourage you to address these issues in class discussion.

Calendar

This class consists of a set of six lectures, and a set of six case discussions, denoted below.

Course calendar.
Week #	Topics	Key Dates
1	Lecture: Introduction: Pricing Strategies - the Good, the Bad and the Ugly
2	Lecture: Economic Value to the Customer (Key Lecture) Case: Exploring EVC: Cumberland Metal Industries
3	Lecture: Measuring Demand and influencing Consumer Behavior: A Practical Approach to Pricing a New Product Case: Pricing a Product for the First Time: Virgin Mobile U.S.A.	First exercise distributed
4	Lecture: How to Price to Best your Competitors? Case: How to React to a Price Cut?: Beauregard Textiles Case: When is Price-Cutting a Good Idea?: Philip Morris	First exercise due
5	Lecture: The Basic Theory of Segmentation Case: Product Line Pricing: American Airlines Revenue Management	Second exercise distributed
6	Lecture: Customizing Prices in Multiple Ways Case: Pricing in the Marketing Mix: Keurig	Second exercise due

Further Reading:

The required textbook for this class is:

Nagle, Thomas T., and John Hogan. The Strategy and Tactics of Pricing. 4th Ed. Englewood Cliffs: Prentice-Hall, 2005. ISBN: 0131856774. (Referred to below as "Nagle.")

In addition, students will be responsible for reading additional articles and cases before each class. The class will spend 5 sessions exploring specific cases in greater depth. These sessions are specified as cases rather than lectures. There is no substitute for reading the case fully before the case discussion.

Course readings.
Week #	Topics	Readings
1	Lecture: Introduction: Pricing Strategies - the Good, the Bad and the Ugly	Luecke, Richard. "Pricing it Right: Strategies, Applications and Pitfalls." In Marketer's Toolkit: The 10 Strategies You Need to Succeed. Boston, MA: Harvard Business School Press, 2006. ISBN: 1591397626. Skim Nagle. Chapter 1 and 2 (intro). If needed, review the break even analysis in Chapter 8/9 of Nagle.
2	Lecture: Maximizing Economic Value to the Customer Case: Exploring EVC	Lecture: Maximizing Economic Value to the Customer Dolan, Robert J. "Pricing a Value-Based Approach." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-500-071. December 21, 1999. Nagle. Chapter 3. Case: Exploring EVC Shapiro, Benson P., and Jeffrey J. Sherman. "Cumberland Metal Industries: Engineered Products Division-1980." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-580-104. January 1, 1980.
3	Lecture: Measuring Demand and influencing Consumer Behavior: A Practical Approach to Pricing a New Product Case: Pricing a Product for the First Time	Lecture: Measuring Demand and influencing Consumer Behavior: A Practical Approach to Pricing a New Product Gourville, John T. "Note on Behavioral Pricing." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-599-114. May 25, 1999. Dolan, Robert J. "Conjoint Analysis: A Managerial Guide." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-590-059. May 8, 1990. Nagle. Chapter 13. Nagle. Chapter 8, pp. 149-157. (Costs.) Nagle. Chapter 4, pp. 96-101. (Reference Effects.) Case: Pricing a Product for the First Time McGovern, Gail. "Virgin Mobile USA: Pricing for the Very First Time." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-504-028. September 8, 2003.
4	Lecture: How to Price to Best your Competitors? Case: How to React to a Price Cut? Case: When is Price-Cutting a Good Idea?	Lecture: How to Price to Best your Competitors? Rao, Ashkay R., Mark E. Bergen, and Scott Davis. "How to Fight a Price War." Harvard Business Review , March 1, 2000. Nagle. Chapter 10. Case: How to React to a Price Cut? Aquilar, Francis J. "Beauregard Textile Company." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-191-058. October 19, 1990. (This is a 2 page case we will quickly cover the 2nd half of class.) Case: When is Price-Cutting a Good Idea? Silk, Alvin J., and Bruce Isaacson. "Philip Morris: Marlboro Friday (A)." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-596-001. September 19, 1995.
5	Lecture: The Basic Theory of Segmentation Case: Product Line Pricing	Lecture: The Basic Theory of Segmentation Black, Jane. "Sharper Tools for Discriminatory Pricing." Business Week, July 31, 2003. Grow, Brian. "The Great Rebate Runaround." Business Week , November 23, 2005. Nagle. Chapter 3, pp. 45-50. (Review.) Nagle. Chapter 4, pp. 60-78. Nagle. Chapter 7. Case: Product Line Pricing Dhebar, Anirudh, and Adam Brandenburger. "American Airlines, Inc.: Revenue Management." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-190-029. July 31, 1989.
6	Lecture: Customizing Prices in Multiple Ways Case: Pricing in the Marketing Mix	Lecture: Customizing Prices in Multiple Ways Dutta, Shantanu, Mark Bergen, Daniel Levy, Mark Ritson, and Mark Zbaracki. "Pricing as a Strategic Capability," Sloan Management Review Vol. 43, No. 3 (Spring 2002): 61-66. Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-SMR-080. April 1, 2002. Case: Pricing in the Marketing Mix Anderson, Eric T. Keurig At Home. Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-KEL-021. February 28, 2005.