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2015/2016  BA-BHAAV6015U  Pricing Management in Theory and Practice

English Title
Pricing Management in Theory and Practice

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Autumn, Second Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 120
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Troels Troelsen - Department of Operations Management (OM)
The course will be taught by Associate Professor Troels Troelsen and Industrial PhD Fellow Martin Jarmatz.
Main academic disciplines
  • Managerial economics
  • Marketing
  • Business psychology
Last updated on 16-02-2015
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: The purpose of the course is to give students a theoretical and practical understanding of the fundamentals of pricing:
  • Critically viewing pricing from various perspectives such as managerial economics, marketing, sales, IT and finance and understanding the interdepence between them.
  • Value-based pricing with a focus on consumer behavior.
  • Pricing opportunities and challenges in a global business environment.
  • Interplay of decision-making, information and mindsets.
  • Applicability of dynamic pricing in continuously changing market environments.
  • Synopsis on state-of-the-art pricing research.
  • Implementation of pricing theories in practice, supported by guest lectures and case studies.
Course prerequisites
Good understanding of English, oral and written, is essential. Basic knowledge of managerial economics, finance, marketing and sales is beneficial as we will look at pricing from all these different perspectives. Students attending this class will get an understanding of how pricing can be applied for capturing customer value and boosting firm profitability.
Prerequisites for registering for the exam
Number of mandatory activities: 2
Compulsory assignments (assessed approved/not approved)
Workshops to be approved

Requirements about active class participation (assessed approved/not approved)
The course recommends active class participation in the lectures to optimize the learning outcome. In all lectures, including guest lectures and workshops, students are encouraged to discuss and critically reflect on the course content. Each student will have to give a group presentation based on a workshop case study.
Examination
Home assignment:
Exam ECTS 7,5
Examination form Home assignment - written product
Individual or group exam Individual
Group assignments are possible, but special rules apply - for further information read the study material.
Size of written product Max. 15 pages
15 pages - for further information read the study material.
Assignment type Written assignment
Duration Written product to be submitted on specified date and time.
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Winter
Make-up exam/re-exam
Same examination form as the ordinary exam
Normally around 7 weeks after the normal exam.
Description of the exam procedure

Will be explained in detail in the study material.
Course content and structure

The content of the course is divided into 4 elements:

 

1. Introduction to Pricing & Managerial Economics

Pricing in the marketing mix, price elasticity, demand & supply, market types, price leadership, revenue maximization, price discrimination, economies of scale, PSD model, cost-plus pricing, CVA analysis, game theory (prisoner’s dilemma), DIM model, value analyses, break-even analysis (shipyard case study).

 

2. Value-based Pricing

Principles and concept of value-based pricing, value-based selling, price sensitivity, customer segmentation, total cost of ownership, EVA analysis, conjoint analysis, key buying factor analysis, willingness-to-pay, consumer behavior, dynamic pricing.

 

3. Price Setting: Strategies & Tactics

Decision-making, new product pricing, list price management, pricing along the life-cycle, pricing strategies & tactics, organizational design.  

 

4. Price Implementation & Control

Price & value communication, sales force management (negotiation, incentives), transactional pricing (discount management, price waterfall, channel management), price control (KPIs, pricing software), pricing as an ongoing process.

 

Next to these 4 elements, guest lecturers are invited from different industries to share their experiences and explain how they apply pricing theories in practice.
Teaching methods
The course consists of 36 lecturing hours with one lecturing hour being equal to 45 minutes. Each lecture consists of 3 lecturing hours. There are 9 lectures and 3 workshops.
The course will require active class participation in the lectures and case solving. Sessions include discussions and oral presentations of specific cases, models or articles by the students in groups. Each group will have to give one oral presentations and hand in mandatory essays for each workshop.
Further Information

The course will be taught in weeks 43--50.
Expected literature

The overall course textbooks:

  1. Thomas Nagle, John E. Hogan & Joseph Zale: “The Strategy and Tactics of Pricing”. 5th edition, Pearson International Edition, 2013, 345 pages, 9781292023236.
  2. Hermann Simon, Frank F. Bilstein, & Frank Luby: “Manage for Profit - not for Market Share". Harvard Business School Press, 2006, 230 pages, 9781591395263.

Supplementary text book, but awesomely good:

  1. William Poundstone: "Priceless", Hill and Wang, 2011, 335 pages, 9781851688296.

All required readings as well as all slideshows from the lectures and the workshops are curriculum.

Selected articles from scientific and managerial journals will be uploaded on Learn in due time, i.e. one week before each lecture.
Last updated on 16-02-2015