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2017/2018  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 Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 50
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Sof Thrane - Department of Operations Management (OM)
The course will be taught by Industrial PhD Fellow Martin Jarmatz and Research Assistant Giulio Zichella
Main academic disciplines
  • Managerial economics
  • Marketing
  • Business psychology
Last updated on 29-01-2018

Relevant links
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:
  • Ability to critically view pricing from various perspectives such as managerial economics, marketing, IT and finance and understand the interdependence between them.
  • Ability to explain the role of consumer behavior for value-based pricing.
  • Ability to reflect on and identify pricing opportunities and challenges in a global business environment.
  • Ability to apply pricing theory to real- life contexts, and to derive managerial implications from research findings.
  • Ability to discuss the applicability of dynamic pricing in continuously changing market environments.
  • Knowledge of state-of-the-art pricing research.
Course prerequisites
Good understanding of English, oral and written, is essential. Basic knowledge of managerial economics, finance, marketing and sales is beneficial, but is not a prerequisite, 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.

Please note that the elective course is reserved for HA students, who wish to write their bachelor project in this elective course.
Examination
Pricing Management in Theory and Practice:
Exam ECTS 7,5
Examination form Home assignment - written product
Individual or group exam Group exam
Please note the rules in the Programme Regulations about identification of individual contributions.
Number of people in the group 2-3
Size of written product Max. 30 pages
3 students max. 30 pages
2 students max. 20 pages
1 student max. 15 pages

It is possible to write the project individually without applying for exemption.
Assignment type Case based assignment
Duration Written product to be submitted on specified date and time.
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Spring
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

Will be explained in detail in the study guide uploaded to CBS Learn at the start of the course.
Course content and structure

Pricing is a key lever for improving firms’ profitability. Pricing however is a complex set of activities and decisions for many firms. Pricing is difficult because of the uncertainty surrounding customers willingness to pay and because important information about demand, cost and interdependencies between functions and markets are not readily available for the pricing decision maker. In this course we investigate how firms can improve their pricing decision-making, how they can organise for pricing and how they can generate and analyse pricing information. The course applies an interdisciplinary approach to understand pricing decisions and activities.

 

The content of the course is divided into 5 elements:

 

1. Introduction to Pricing & Managerial Economics

Topics covered: pricing in the marketing mix, price elasticity, supply & demand, market types, price leadership, revenue maximization, price discrimination, economies of scale, cost-plus pricing, CVA analysis, game theory (prisoner’s dilemma).

 

2. Value-based Pricing

Topics covered: 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 behaviour, dynamic pricing, irrationality in pricing.

 

3. Price Setting: Strategies & Tactics

Topics covered: decision-making, new product pricing, list price management, pricing along the life-cycle, pricing strategies & tactics.  

 

4. Price Implementation & Control

Topics covered: price & value communication, sales force management (negotiation, incentives), transactional pricing (discount management, price waterfall and channel management), price control (KPIs, pricing software).

 

5. Pricing Perspectives

Topics covered: price fairness, discount practices, pricing practices in different organizational designs, pricing in startups.

 

Next to these 5 elements, around 3 guest lecturers are invited from different industries to share their experiences and explain how they apply pricing theories in practice. Last time, we had presentations from the head of pricing of a global pharma company, as well as from a senior consultant and partner of two well-renowned consultancies.
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.

Each group have an opportunity to give one oral presentation that focus on a particular pricing problem that the students want to analyse in their project. The presentation is thus intended to be an option for feedback on the project. It is expected that many of the students will also write bachelor thesis in pricing. The presentation and project exam may be used to develop ideas and data that can be further elaborated upon in the bachelor thesis.
Feedback during the teaching period
The students will receive feedback on the workshop reports and presentations.

The student will receive feedback on the proposed topic for the essay / mini project.
Student workload
Class and exam preparation 179 hours
Teaching 27 hours
Expected literature

The overall course textbook:

  1. Thomas Nagle, John E. Hogan & Joseph Zale: “The Strategy and Tactics of Pricing”. 5th edition, Pearson International Edition, 2013, 345 pages, 9781292023236.

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

Selected articles from academic journals will be uploaded on CBS Learn in due time, i.e. one week before each lecture.
Last updated on 29-01-2018