• Knowledge of state-of-the-art pricing research.
• Ability to apply pricing theory to real- life contexts, and to derive managerial implications from research findings.
• Ability to critically discuss pricing from various perspectives such as managerial and behavioral economics, marketing and organisation theory.

Pricing management is one of the most powerful levers for improving firms’ profitability. Therefore, pricing is moving up the strategic agenda in many firms, which now devote considerable effort to the management of their pricing process.

Pricing management is also a complex task that involves multiple departments, comprises a variety of techniques, and diverse sets of information. This course presents relevant theories that address such complexity, and pricing techniques used in business contexts. By the end of this course, you will acquire a holistic view on pricing as a key to competitive advantage.

From a theoretical perspective, the course takes an interdisciplinary perspective. Intellectual curiosity and background diversity is a plus, as we draw on insights from marketing, organization theory, managerial and behavioral economics. Throughout the course, theories are presented and discussed critically, underlining their usability and limitations in the local and global business contexts. The course is designed so that students writing their bachelor thesis on pricing may find a suitable theoretical angle, and apply it on a business case.

From a pedagogical perspective, the course takes a practical approach to pricing challenges. In general, each session starts out with discussing a particular pricing challenge (e.g. how to gather relevant pricing information inside/outside the firm?) as well as models and techniques for solving them (e.g. conjoint analysis). Following this, the session will apply solutions in practice through class discussions, simulations, exercises, casework, and workshops. This approach allows you to acquire hands-on experience on the techniques of pricing, get an understanding of the organizational practices and processes, and give you models and theories to analyze pricing challenges. 

The course will make use of guest lectures to illustrate the practical application of the models and theories of the course. Around three guest lecturers are invited from different industries to share their experiences and explain how they apply pricing theories in practice. Last year, we had presentations on how to price environmentally sustainable products, value-driven social media influencing, and pricing consultancy.

The content of the course is organized into four main modules:

1. Introduction to Pricing  & the classic pricing paradigms

This module lays the foundation for the course in terms of the technical basis of pricing. The focus will be on introducing the concept of pricing and its importance in several disciplines (e.g. managerial economics, marketing). We will then move on to introducing the classic pricing paradigms – that is cost-based and competitor-based pricing – as they are often used in practice. Several classic pricing techniques are introduced (e.g. the construction of list prices, price waterfall, cost-plus). Finally, we will discuss classic pricing techniques’ limitations, and challenge pricing paradigms’ assumptions by introducing the topic of competitive advantage via pricing management.

2. The new pricing paradigms 1: Value-based pricing & Behavioral pricing

In this module we introduce two key elements in contemporary pricing reseearch and practice: value and behavior. First, we will discuss the importance of managing pricing based on customers’ perceived value instead of on internal costs. Second, we will discuss customers’ choice and behavior through the analysis of heuristics and biases, as these are fundamental in human decision making both in B2B and B2C. Finally, we will introduce a selection of state-of-the-art pricing techniques (.g. price sensitivity, conjoint analysis, key buying factor analysis, willingness-to-pay, dynamic pricing) and discuss their practical usefulness and limitations in capturing customers’ value.

3. The new pricing paradigms 2: Pricing implementation and control

In this module we will focus on implementation of pricing decisions (e.g. sales force management, negotiations, and incentives) and the control of pricing decisions (e.g. discount management, Key Performance Indicators (KPIs), use of pricing softwares). This module discusses organizational issues in pricing. The focus will be on coordination efforts for pricing (e.g. new product pricing, target costing) and effective communication practices.

4. Pricing Perspectives and future outlook

This module discusses the various perspectives covered in the course further explicating their basic assumptions and relevance. There will also be a session on emerging topics in pricing (e.g. pricing in startups) from a research and a practitioner perspective. 

The overall course textbook:

1. Thomas Nagle,  & George Müller: “The Strategy and Tactics of Pricing”. 6th edition, Routledge international Edition, 2018, 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.