• Knowledge of the central theories and techniques of pricing
• Ability to analyse pricing problems in own firms or cases through theories and techniques
• Ability to critically reflect upon the relevance and use of theories and techniques

Pricing is a significant driver of business profitability. However, a number of factors complicates pricing management. There is considerable uncertainty about customer willingness to pay and many markets are intransparent due to discounts. Within the company, pricing decisions should be coordinated, but the various foci and incentives in sales, marketing, production and finance create conflicts in relation to pricing decisions.

The course offers a systematic approach for handling these challenges, through a value based approach to pricing. The value-based approach will be analyzed from technical, strategic and behavioral economic perspectives. The technical approach focuses on techniques for gauging customers’ willingness to pay through con joint analysis. The behavioral economics approach focuses on how firms can utilize customers (B2B and B2C) bias and heuristics in their price setting and how they can reduce risks from customers considering pricing policies to be unfair – e.g. if firms price discriminate. The strategic perspective focuses on how pricing can be embedded in firms decision-making and pricing decisions are coordinated across the multiple functions and markets involved in the pricing decision. The course will also focus on the role of cost and competitors in the pricing decision as well as how pricing policies are implemented throughout the organization through control structures.

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 will include answers to the following questions:

- What methods can be used to set prices?

- How is customer value determined via conjoint analysis?

- How can we understand customers in B2C and B2B markets that have a buying behavior that is biased and characterized by heuristics?

- How is customer, segment and channel profitability calculated?

- How are discounts monitored and how are sales and marketing aligned with pricing objectives?

Undervisningstidspunkt: Tirsdag 17.10-20.40 i uge 35-41

• Thomas Nagle, & George Müller: “The Strategy and Tactics of Pricing”. 6th edition. Taylor Francis Ltd, 2018,
• Thaler, R. H. (2015) Misbehaving: the making of behavioral economics. New York, W.W Norton and Company Inc
• Hinterhuber, A. (2016). The six pricing myths that kill profits. Business Horizons, 59(1), 71-83
• Lancioni, R. (2005). Pricing issues in industrial marketing. Industrial Marketing Management, 34, 111-114
• McManus, L (2007) The Construction of a Segmental Customer Profitability Analysis. Journal of applied management accounting research.
• Frenzen, H., Hansen, A., Krafft., M., Mantrala, M.K., & S. Schmidt (2010) Delegation of pricing authority to the sales force: An agency-theoretic perspective of its determinants and impact on performance, Intern. J. of Research in Marketing 27 58–68
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