Pricing Strategy in Practice

Pricing Strategy in Practice

This course is part of Pricing Strategy Optimization Specialization

Instructors: Jean Manuel Izaret

What you'll learn

How to use the three lenses to set an optimal strategic price to maximize revenue
How to approach a pricing case, glean information, and work through a complicated pricing decision
How to utilize tools and data to analyze and recommend a strategic response to a real world pricing situation

Skills you'll gain

Details to know

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Assessments

6 assignments

Taught in English

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This course is part of the Pricing Strategy Optimization Specialization

When you enroll in this course, you'll also be enrolled in this Specialization.

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There are 4 modules in this course

In this project-centered course, Darden's Ron Wilcox and BCG's Thomas Kohler will walk you through a real-world case, from problem statement to detailed analyses. You'll use all three lenses (cost, customer value, and competition) to recommend an optimal price—and then adjust to market disruptions. Utilizing the concepts, tools and techniques taught in previous Specialization courses—from basic techniques of economics to knowledge of customer segments, willingness to pay, and customer decision making to analysis of market prices, share, and industry dynamics—you will practice setting profit maximizing prices to improve price realization. You'll finish the course with a portfolio-building project that demonstrates your pricing prowess from this Darden School of Business at the University of Virginia and Boston Consulting Group course.

Welcome to the course! We'll kick off the week with an overview of the project, which centers around Philips introduction of an eco-friendly light bulb. Once you've read the case, Thomas and Ron will guide you as you apply the cost lens to analyze the economics of the LED light bulb Philips has introduced to the market. After you've analyzed the economics of the case, Ron and Thomas will debrief to make sure you are on the right track. You will also hear from BCG pricing experts, who will share their lessons and tips gleaned from years of helping clients in multiple industries optimize their prices and improve the bottom line.

What's included

15 videos5 readings3 assignments3 discussion prompts

15 videosTotal 60 minutes

Pricing Specialization Overview2 minutesPreview module
Three Lenses4 minutes
Course Overview4 minutes
Developing the Three Lens Framework2 minutes
Using the Three Lenses8 minutes
Knowledge Is Not Enough3 minutes
Case Introduction1 minute
Assignment 1 Introduction4 minutes
Review: Basic Metrics of Pricing: Margins and Markups5 minutes
Calculating Power Usage and Cost3 minutes
Assignment Debrief: Superbulb Failure3 minutes
Assignment Debrief: LED Price Considerations3 minutes
Assignment Debrief: Retailer Margin Justification5 minutes
Assignment Debrief: Customer Economics4 minutes
The Myth of the Invisible Hand2 minutes

5 readingsTotal 52 minutes

Course Overview & Requirements10 minutes
Survey10 minutes
Philips: Pricing the LED Bulb (A)10 minutes
Week 1 Case Questions10 minutes
Case-based Learning at Darden12 minutes

3 assignmentsTotal 60 minutes

Superbulb Economics20 minutes
LED Price Considerations20 minutes
Customer Economics20 minutes

3 discussion promptsTotal 30 minutes

Connect with your classmates!10 minutes
Beginning your case analysis10 minutes
Is the 55% retailer margin justified?10 minutes

This week, we will dig deeper into customer value using conjoint analysis to determine the price sensitivity of consumers and businesses. Thomas and Ron will show you how to graph the conjoint data to easily compare these two markets--and you'll do additional analysis of the conjoint data to learn more about what consumers value. Using your analysis, you'll hone your pricing recommendation.

What's included

8 videos1 reading2 assignments

8 videosTotal 36 minutes

Assignment 2 Introduction1 minutePreview module
Conjoint Analysis: Steps 1 – 38 minutes
Conjoint Analysis: Step 4 and Product Preferences7 minutes
Attribute Trade-offs2 minutes
Attribute Importances4 minutes
Conjoint Analysis: Willingness to Pay5 minutes
Assignment Debrief: Learning about the Market Using Conjoint Analysis3 minutes
Assignment Debrief: Calculating WTP Using Conjoint3 minutes

1 readingTotal 10 minutes

Week 2 Case Questions10 minutes

2 assignmentsTotal 75 minutes

Learning about the Market30 minutes
Calculating WTP Using Conjoint45 minutes

This week, you will pull everything together to make a pricing recommendation for Philips. You will recommend which markets they should serve (B2B, B2C, or both) and how they should price their LED bulbs. You'll learn how to lay out your thought process and rationale in a tightly edited slide deck that presents your recommendations in a compelling way.

What's included

2 videos1 peer review

This week, you will respond to new developments in the LED light bulb market: a new competitor and new regulations. Just like in real life, you'll need to adjust your strategy when the competitive landscape changes and new regulations emerge and reconsider the retail marketplace and reevaluate the B2B market. You'll also head out into your own "real world" and do some detective work about the LED bulb market in your area and relate those finding to the case. We'll finish the course with BCG pricing experts sharing their insights into what makes pricing such a rewarding field.