The surge in access to detailed marketing data and analytic tools has elevated pricing to the forefront of corporate strategy and the driving force of strategic revenue growth. Emerging roles like the Chief Growth Officer (CGO) and Chief Revenue Officer (CRO) focus predominantly on pricing decisions. For most companies, improving pricing strategy represents both a strategic goal and a strategic challenge. Most struggle with the same basic questions: How do we formulate a pricing strategy? What should we charge? Which data and methods should we be using to make pricing decisions? Who should be in charge of pricing decision-making?
In practice, most firms still use ad hoc rules-of-thumb. The simplicity of these rules comes at a substantial cost to a firm’s potential profitability. Most rules fail to align pricing with consumers’ perceived value and underlying willingness-to-pay. Many firms also struggle with the delegation of pricing responsibility within the organization, exacerbating the use of rules-of-thumb that fail to deliver effective pricing decisions and monetize. The fact your company makes money does NOT confirm the optimization of your prices: you may be leaving substantial money on the table.
This course blends marketing analytic frameworks, marketing strategy, microeconomic theory and customer data to formulate actionable, evidence-based pricing strategies. Students learn how to coordinate pricing decisions with the rest of the marketing value proposition. Numerous pricing structures are developed in the course, along with their microeconomic foundations. Students learn the underlying theory for each pricing structure, along with the practical considerations for implementation. In several modules, students will use statistics and AI to implement optimized pricing decisions.
The course combines cases and analytic assignments to teach students how to design and execute pricing strategies. Students work with different forms of data and corresponding analytic methods. The examples span a wide array of business contexts including services, B2B and international.
During the quarter, there are 4 group homework assignments, 3 group case write-ups and 1 individual case assignment. Week 1 attendance is mandatory. The individual assignment is due during week 3. If you register late for the course, you must still submit this first assignment in class during week 3. Failure to submit this assignment will result in a grade of zero and no exceptions will be made. Provisional grades can be assigned so long as students complete all the assignments during the quarter.
For some of the group homework assignments, you will need to run a regression and/or use optimization software. Two review sessions have been scheduled with one of the course TAs to assist those students who are unfamiliar with these techniques.
For the group assignments and group case write-ups, students need to form a group of 4-5 people. All group members must be registered for the same section. No exceptions will be made.
