Price is a unique category of the marketing mix as it is the only component that represents revenue for the firm. The remaining P’s (product, place, and promotion) are costly activities undertaken to create value for the consumer. Price, in its ideal form, recaptures this value. Yet, most companies adopt very simple heuristics, or “rules of thumb,” for setting prices, often divorced from firm strategy and economic reality.
This course will introduce the student to frameworks relevant for making pricing decisions.
Our approach for each topic will generally be:
- Review existing pricing practices of firms and appreciate their limitations
- Develop an understanding of profitable pricing decisions
- Create a framework for introducing these concepts to firms
- Understanding value
- Importance of value in buying decisions
- The value proposition