Purpose and description of the course
Pricing is a main driver of firms’ profitability and successful business development. However, in many firms pricing has been neglected and is often used only for meeting short-term financial goals. Furthermore, pricing decisions are often based on cost information or competitive positions. Such an approach does not leverage the full potential of pricing. Therefore, this course focuses on how firms can use pricing as a strategic lever to increase a focus on value generation and profitability.
The course sets off with sessions focusing on value-based pricing and the techniques used for price setting including segmented pricing and bundling. A particular focus is here on how to estimate customer value and how to affect customers’ perception of value through insights from behavioral economics. The course then moves on to the role of costs in pricing: here you will learn how to estimate customer profitability through more elaborate cost analyses. The third day focuses on how to control and detect margin leakage through analysis of sales discounting practices and how to coordinate pricing and product/service development. Finally, the last day provides a session on future perspectives where topics such as pricing of services, greening, and the use of Artificial Intelligence (AI) in pricing are discussed. The last day will also provide a forum for discussing the synopsis and helping you apply and fit theories and models to problems in your organization.
The pricing course in general offers a number of tools and models that helps firms develop their pricing practices, structures and processes. However, pricing is not just a discipline requiring technical insights into the tools of pricing. Pricing require people and change management skills and insights into human behavior. For such reasons, the course also discusses more theoretical and reflective elements. For example, the course discusses behavioral economics in order to understand customer reactions to changes in pricing practices but also how insight in to human behavior can be used to affect customers’ perception of value. The course approach is furthermore interdisciplinary, drawing on marketing, economics and organizational perspectives, in order to generate a comprehensive understanding of pricing that makes it possible to make tools, theories and models relevant to participants in different professional contexts.
The course will be delivered in the following manner. Each session starts out with discussing a particular challenge as well as models, theories and techniques for analyzing and solving them. Following this, the session will move on to more detailed work on challenges and solutions through simulations, exercises, and workshops.
Key themes in the course
- Techniques and tools for price setting.
- Value driven approaches to pricing including segmented pricing, bundling, and the calculation of customer value through conjoint analysis.
- Human behavior including how biases, fairness concerns and heuristics affect customers’ perception of value.
- The use of cost information in pricing with a focus on cost to serve and customer profitability analysis.
- Organization and governance of pricing, including techniques for analyzing sales discounting behavior, pricing policies, and change management perspectives
- Pricing strategies for services and servitization.
- The use of AI in pricing.
Your learning outcome
In this course you will:
- Acquire knowledge about strategies to tackle key challenges in pricing.
- Develop an understanding of and train the techniques of pricing including approaches to price setting, pricing policies, behavioral aspects of pricing, organization and governance of pricing, and pricing of services.
- Apply theories and models of the course to your own organization.
- Get a comprehensive understanding of pricing focusing on value and encompassing market, economic, and organizational perspectives.
Who should attend this course
This course is relevant for all interested in getting a comprehensive understanding of the techniques, theories, and practices of pricing. This includes participants from general management, project management, product development, marketing, finance, consulting and pricing.