Customer Value in Pricing Strategy

About this course: The traditional approach to pricing based on costs works to pay the bills, but it leaves revenue on the table. You can, in fact, price your products in a way that increases sales--if you know what your customers are willing to pay and can leverage psychology to create better deal and discount plans. In this course, we'll show you how to price a product based on how your customers value it and the psychology behind their purchase decisions. Led by Darden faculty and Boston Consulting Group global pricing experts, this course provides an in-depth understanding of value-based pricing and how to use it to capture more revenue. By the end of this course, you'll be able to... -- Apply knowledge of customer value to price products -- Leverage core value-based pricing techniques to inform pricing decisions -- Measure customer willingness to pay using models (surveys, conjoint analysis, other data) -- Use knowledge of consumer psychology to set prices beneficial to both consumers and sellers

Created by:  University of Virginia, BCG

• Taught by:  Jean Manuel Izaret, Senior Partner and Managing Director, Leader of BCG’s Global Pricing Practice

• Taught by:  Thomas Kohler, Associate Director, Pricing

  Marketing, Sales & Pricing Practice

• Taught by:  Ronald T. Wilcox, NewMarket Corporation Professor of Business Administration & Senior Associate Dean for Degree Programs

  Marketing

Basic Info Course 2 of 4 in the Pricing Strategy Optimization Specialization Level Beginner Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.8 stars Average User Rating 4.8See what learners said Задания курса

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Syllabus


WEEK 1


Understanding Customer Value



Welcome to Week 1! We kick off the week with an overview of the course so that you'll know what to expect with an optional review of the specialization and three pricing lenses (watch these if you want a refresher). Then we'll dive into the content! This week, you'll learn about customer value--what it is and its relevance to pricing. You'll see how consumers make decisions--and why knowing consumers' willingness to pay is so important when setting a product's price. Next, we'll take a look at customer value in developing economies and how and why companies succeed (or not!) with value-based pricing in these markets. You'll finish the week with a solid understanding of "customer value" and how that impacts pricing strategy.


13 videos, 3 readings, 2 practice quizzes expand

1. Video: Pricing Specialization Overview
2. Video: Three Lenses
3. Вопрос для обсуждения: Where do you see examples of the three lenses at work?
4. Video: Module & Course Introduction
5. Материал для самостоятельного изучения: Course Overview & Requirements
6. Материал для самостоятельного изучения: Survey
7. Материал для самостоятельного изучения: Using Discussion Forums to Deepen Your Learning
8. Вопрос для обсуждения: Meet and Greet
9. Video: Consumer Decision Process: Involvement and Visibility
10. Video: Mapping Purchase Processes
11. Video: Customer Value and Value Drivers
12. Video: Differentiating Customer Value by Customer Segment
13. Video: Willingness to Pay and Demand Curves
14. Тренировочный тест: Practice Quiz on Customer Value Basics
15. Video: Serving Consumers in Developing Economies
16. Video: Story of Nano
17. Video: Story of Ala
18. Вопрос для обсуждения: Lessons from Unilever and Tata
19. Video: Pricing Strategies for Developing Economies
20. Тренировочный тест: Practice Quiz on Customer Value in Developing Economies
21. Video: Module Takeaways

Graded: Week 1 Understanding Customer Value Quiz

WEEK 2


Implementing Value-based Pricing



Now that you have an understanding of customer value, let's dive into value-based pricing in greater depth. This week, we'll show you how to price to the demand curve using three tools: the price piano, the price ladder, and incentive curves. We'll take a look at customer value drivers in a B2B context and walk through a process to price a new product. Then Ron and Thomas will show you how price elasticity plays into value-based pricing. Implementing value-based pricing requires detailed analysis. Let's get started!


11 videos, 3 practice quizzes expand

1. Video: Module Introduction
2. Video: Price to Demand Curve
3. Video: Application of Price to Demand Curve: Price Piano
4. Video: Application of Price to Demand Curve: Price Ladder
5. Video: Application of Price to Demand Curve: Incentive Curves
6. Video: Customer Value Drivers in a B2B Context
7. Тренировочный тест: Practice Quiz on Pricing to the Demand Curve
8. Video: Value-based Price Setting for a New Product: Steps 1&2
9. Video: Value-based Price Setting for a New Product: Steps 3-5
10. Тренировочный тест: Practice Quiz on Pricing New Products
11. Video: Price Elasticity: Intersection of Economics and Customer Value 1
12. Video: Price Elasticity: Intersection of Economics and Customer Value 2
13. Тренировочный тест: Practice Quiz on Pricing Based on Economics and Customer Value
14. Video: Module Takeaways

Graded: Week 2 Implementing Value-based Pricing Quiz

WEEK 3


Measuring Customer Preferences



As you learned in Week 1, understanding customer willingness to pay (WTP) is critical for effective pricing. This week, we'll show you two ways to measure willingness to pay: surveys and conjoint analysis. You'll see how one company, Adios Junk Mail, used surveys to better understand WTP. Conjoint is a terrific tool, and we'll walk you through how it's used to determine product preferences and prices. You'll finish the week with a solid understanding of how to measure customer preferences and use this information in your pricing strategy.


15 videos, 1 reading, 2 practice quizzes expand

1. Video: Module Introduction & Overview of Methods to Assess WTP
2. Video: Obtaining Willingness to Pay from Surveys
3. Video: Interpreting Combined Survey Data
4. Video: Case Intro: Adios Junk Mail
5. Материал для самостоятельного изучения: Case: Adios Junk Mail
6. Video: Case Debrief: Adios Junk Mail
7. Тренировочный тест: Practice Quiz on Obtaining WTP from Surveys
8. Video: Conjoint Analysis Applications
9. Video: Why Conjoint?
10. Video: Conjoint Analysis: Steps 1-3
11. Video: Conjoint Analysis: Step 4 and Product Preferences
12. Video: Attribute Trade-offs
13. Video: Attribute Importances
14. Video: Conjoint Analysis: Willingness to Pay
15. Video: Conjoint Analysis: Other Ways to Interpret Data
16. Video: Conjoint Analysis: Propensity Modeling
17. Тренировочный тест: Practice Quiz on Conjoint Analysis
18. Video: Module Takeaways

Graded: Adios Junk Mail: Case Quiz
Graded: Week 3 Measuring Customer Preferences Quiz

WEEK 4


Considering the Human Nature of Customers



Last week you considered pricing using a rational utility model. But humans are not always rational beings--and your pricing strategy needs to consider other behavioral drivers. We'll look at the psychology behind consumer purchase decisions and the mental accounting that impacts those decisions. Next we'll consider consumer price perceptions and ways to frame prices and create better deals and discount plans that work for both the consumer and the seller. Then, we'll take a look at two real-world cases, the Portland Trailblazers and Fidelity Investments so that you can practice using tools from throughout the course in a real-world case. You'll finish the course with fresh insights into value-based pricing and its applications.


15 videos, 1 reading, 3 practice quizzes expand

1. Video: Module Introduction
2. Video: Mental Accounting and Price Perceptions
3. Video: Money is Not Money
4. Video: What We Can Learn from Ginsu Knives
5. Video: Integrating Losses
6. Video: Minimizing Losses and Give a Win with a Loss
7. Тренировочный тест: Practice Quiz on Mental Accounting
8. Video: Considering Consumer Price Perceptions: The Framing Effect
9. Video: Gain and Loss Frames in Pricing
10. Video: The Pain of Paying
11. Video: Separate the Pain of Paying from Consumption
12. Тренировочный тест: Practice Quiz on Consumer Price Perceptions
13. Video: Anchoring and Price Primacy
14. Video: Visual Tricks, Free as a Special Price, and Hedonic Bundling
15. Video: Price Decoy
16. Тренировочный тест: Practice Quiz on Mental Shortcuts that Affect Pricing
17. Материал для самостоятельного изучения: Case Debrief Videos
18. Video: Applying the Customer Value Lens: Subscription Pricing
19. Video: Module Takeaways & Course Wrap-up

Graded: Value-based Pricing
Graded: Week 4 Consumer Psychology Quiz