Pricing and Value Extraction Strategies

Gangwar, Manish
Associate Professor, Marketing, ISBManish Gangwar’s research interest lies in understanding and exploring marketing issues using quantitative models. His current research explores optimal pricing strategies for frequently purchased categories and digital services.
Programme Objectives
Regardless of how innovative and high quality, firm's product, services, advertising, and sales campaign is, their profitability critically depends on how those products and services are priced. The fundamental role of pricing is to convert the value created by the firm's offerings (be a product or service) into revenue and profits. Profit is made up of three components: price, sales volume, and cost. Managers often disproportionately focus their efforts on increasing sales (i.e., invest in digital and social media advertising) and reducing cost, but do not spend enough efforts to set right prices. Price setting is an art and seldom boil down to picking a number; nonetheless, price discovery is probably the most crucial of all marketing mix decisions. Sustainable and profitable pricing requires a not only good understanding of monetary benefits but also psychological value that drives the purchase decision. Despite considerable advances in both academic and applied research, many managers do not invest enough to fully understand the value of their products to various customer segments and often, focus too much on costs and react to competitive offerings while setting prices.

This course will introduce you to some of the fundamental concepts and strategies that will help you make better pricing decisions to improve profits from your offerings. The course will expose you to frameworks and analytical foundation that will help you in designing an effective pricing policy. I will primarily use lectures combined with cases, in-class exercises and discussions to enhance our grasp of various strategic pricing options. Specifically, you will learn:
 
• Commonly used pricing method
• Value pricing framework
• Methods to estimate demand and willingness to pay
• Price customization and other strategies to improve profitability
• Non-linear pricing strategies for selling services and goods
 
Note: Unlike auctions and B2B contracts where customers are actively involved in the price-setting process, this course primarily focuses on predetermined or posted prices, where firm sets the prices keeping in mind that customers often have other alternatives to fulfill there needs.

For more information:

To Apply for the Programme: