This course starts with the basic understanding of classical theory of pricing. It then progresses towards understanding and analysing cost-based pricing heuristics, demand curve analysis, and competition based pricing.
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Pricing products or services is a challenging decision for many business owners.
What is a good starting point for sound pricing decisions? This course provides an economic framework that lays the foundation for good pricing decisions. This course delves into the impact of cost, competition, and customer side factors on pricing. The course also goes into the company objectives that shape pricing goals.
This course also covers the repercussions of the most recent and globally transformative event (i.e., COVID19) on Pricing.
What you'll learn
By the end of the course, you will be able to:
- Evaluate pricing using the 3C+O framework
- Apply cost based pricing heuristics
- Identify and account for relevant competition while making pricing decisions
- Identify the drivers of consumer value perceptions and their impact on pricing
- Understand the mechanism of price discrimination and its applications in practice
Syllabus
Week1 : Economic foundations of Pricing
- What is market clearing price?
- Understand price setters vs price takers, supply and demand curves.
- Covid price increases/decreases/no-change
Week 2: Fundamentals of Demand or Customer point of view
- What is demand?
- Price response functions
- Revenue maximization
- Elasticity
Week 3: Cost based pricing decisions
- Terms: (marginal cost, fixed cost, incremental cost), CM, operating margin, %margin, mark-up
- Price optimization
- Break-even sales change
Week 4: Competition and Objectives
- Competition based heuristics
- Understanding objectives and economic framework
Week 5: Economics of Multiproduct Pricing
- Demand curves and pricing
- Price discrimination
- Game theory
- Auctions
