Pricing Strategies

None

Microeconomics at the Bachelor level, Calculus.
Students cannot register for, and /or take the exam in both Pricing Strategies (teaching activity id: 9267501) and Industrial Organization (teaching activity id: 9111601).   Only one of the two courses can constitute part of a student´s choice of courses / electives. If a student has already passed one of the two courses in a prior semester, registration for the other is not possible.  

This course prepares students to address strategic and tactical pricing issues and to identify profit-boosting changes in pricing practices across a range of professional contexts – as management consultants, product managers, entrepreneurs, business unit managers, and M&A advisors. 

Pricing offers managers one of their most powerful levers for maximizing profits and shareholder value.  However, this value often lies untapped within many organizations. Managers often lack a clear understanding of how to improve on historical pricing practices within their companies and industries and how to apply such knowledge to new product settings. Some examples of questions we will address in the course: How does a firm determine the price for a new product? How does a firm assess whether the current price is appropriate? What is value pricing? Which price segmentation strategy is optimal? How can a firm avoid a price war? 

This course will draw on a mixture of analytical approaches to business strategy grounded on basic microeconomic principles, and economic theory to describe approaches that are useful for optimal pricing decisions. The purpose of the course is to enable students to apply microeconomic insights to identify optimal business strategies for firms. The course develops the technical skills required to compute these strategies, by availing of a mix of lectures, exercise classes, case discussions, and in-class demonstrations based on real-world examples. 

The course offers a microeconomic based approach examining the following topics: 
• Solutions to profit maximization problems. 
• Optimal pricing mechanisms under different information structures. 
• Optimal strategies for a firm: Nash equilibrium in market competitive scenarios. 
• Incentives: Selling Strategies, Agency, and Auction Design. 

To fulfill the purposes of the course the student must be able to, for a specific problem, concerning the content key areas, be able to demonstrate:

The student is able to: 
• Identify the relevant theoretical models to decision-makers or firm managers.  
• Compare and contrast these models and their relevance and applicability. 
• Predict a need for further development of these models and theories. 

The student is able to
• Justify the managerial implications of specific strategies for a firm. 
• Identify opportunities to enhance profits in a firm by applying theoretical insights gathered. 

Examples: Textbook: Vohra, Rakesh V. and Lakshman Krishnamurthi (2012). Principles of Pricing: An Analytical Approach, Cambridge University Press. Additional reading: see blackboard.  Case studies. 

Individual studies as preparation for the lectures in the classes and a total of 32 hours in class (including practical exercises). Project work in groups. The readings for the course will be outlined by the end of June so that the students can commence the preparation well in advance of the teaching period.  

8 lessons of 4 hours in the period August 16th – 29th.

The workload of the course is, on average, distributed as follows: 
Class teaching: 32 hours 
Group and individual work beyond classes: 40 hours. 
Preparation for teaching: app. 168 hours. 
Preparation for exam: app. 30 hours. 
Total: 270 hours. 

NOTE - This course is identical with the former course 9267501 Pricing Strategies