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Course Title: PRICING STRATEGIES UNITS
Course Level:PG
Course Code: MKTG713 3 0 0 0 3

Credit Units: THREE

Course Objectives:

The pricing of a product or service is one of the most important, most complex and least understood marketing decisions. This course covers some of the most
popular pricing practices, explores the issues surrounding these practices, and identifies the underlying fallacies. It develops a conceptual framework - based on
economic fundamentals - for effective proactive decisions.
The course is structured around three parts:

The course analyzes how costs impact the pricing decision.

It looks at the marketing approaches/ options available with the marketer, which can be used to understand the customer’s psychology better. It also
considers the information provided by the customers knowingly and/or unknowingly, which can be used for better pricing decisions.

The course looks at how the competition affects the pricing decision. The course concludes with the pricing strategies, pricing tactics and applications
Prerequisites:

The student opting for this course should have successfully completed the course Marketing Management. The student is expected to combine the learning
across specialization courses including Quantitative Techniques and Operations Management.

Student Learning Outcomes:

The student who completes the course successfully will be able to outline, relate and classify the impact of pricing under various economic cycles and
identify specific strategies that help the product stay relevant in cyclical downturns
The student will be better positioned to discover and demonstrate different concepts of pricing the product or service to nullify the impact of
competitors’ pricing strategies.
 The course will help the student appraise, assess and choose strategic and tactical pricing issues and identifying profit-boosting changes in pricing
practices across a range– as product managers, business unit managers, management consultants, entrepreneurs and M&A advisors

Course Contents/Syllabus:
Weightage (%)
Module I The role of pricing in value creation
Why pricing is becoming a central issue to businesses today 10%
Conventional approaches to pricing – and their limitations
Strategic pricing principles
Legal issues in pricing
Module II Costs & profitability analysis
Identifying relevant costs for making pricing decisions 15%
Pricing for profit-maximization – break-even sales analysis
How cost structures influence pricing strategy
Cost impact of pricing decisions
Module III Managing Competitive Dynamics
Pricing as a “game” – Prisoner’s Dilemma 15%
Key building blocks for managing price competition: competitive analysis, competitive strategy and signaling
Effective responses to competitive pricing moves
Applications of foundational pricing concepts and techniques
Module IV Segmented Pricing
Benefits of segmented pricing 25%
Techniques for segmented pricing
Framework for investigating segmented pricing opportunities
Negotiated pricing: Structuring and managing price negotiations
Menu pricing
The elements of price: Quantity discounts; Two-part tariffs (signup plus usage fees)
Bundling Product Line Pricing: Pricing substitutes and complementary products, Pricing to drive image or to
drive traffic
Markdown Pricing
Performance-based Pricing Price Rationalization: “Pocket price” and “pocket price band”
SKU pricing analysis
Module V Theories Of Consumer Behavior
Theories of consumer behavior (that focus on price perceptions and response) 10%
o Utility Theory; Indifference Theory; Attitude formation/ change; Individual and Collective Change;
Quality Perception
Rational views, Subjective views
 Framework for analyzing customer WTP (willingness to pay) and response to price changes
How marketers can influence price perceptions and elasticity
Module VI Pricing Strategies
Theories influencing Pricing Strategies 25%
o Positioning of the product/ service
o Perception around the product/ service
Penetration Pricing
Price Skimming
Monopoly Pricing
Every-day low pricing strategy
Pricing of Services
On-line pricing
Sectoral Pricing

Pedagogy for Course Delivery:

This class will be taught using a mix of theory and the case method. In addition to assigning the case studies, the course instructor will spend considerable time
helping you understand the concept of pricing, its impact, its framework and analysis. We encourage the students to take-up a project with a leading company
together with this course to put theory to practice.

Assessment/ Examination Scheme:

Theory L/T (%) Lab/Practical/Studio (%) End Term Examination

30% NA 70%

Theory Assessment (L&T):

Continuous Assessment/Internal Assessment End Term
Examination

Components (Drop
down)
Mid-Term Exam Project Viva Attendance
Weightage (%)
10% 10% 5% 5% 70%

Text & References:

1. Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures; Tim J. Smith; Cengage Learning; 1 edition, ISBN-
10: 0538480882
2. The Art of Pricing: How to Find the Hidden Profits to Grow Your Business; Rafi Mohammed; Crown Business; ISBN-10: 1400080932
3. The Strategy and Tactics of Pricing: Thomas Nagle; Prentice Hall; 5 edition; ISBN-10: 0136106811
4. Value-Based Pricing: Harry Macdivitt; McGraw-Hill; 1 edition; ISBN-10: 0071761683
5. Pricing and Profitability Management: Julie Meehan; Wiley; 1 edition; ISBN-10: 0470825278

Any other Study Material:

Choosing the Best Pricing Techniques to Address Consumer Goods Pricing Challenges
(http://www.ipsos.com/marketing/sites/www.ipsos.com.marketing/files/pdf/BestPricingTechniques.pdf)
Pricing New-to-Market Technologies: An Evaluation of Applied Pricing Research Techniques
(http://www.ipsos.ru/whitepapers/Ipsos%20Group/IpsosInsight_WP_PricingTech.pdf)
8 Pricing Research Techniques (http://blog.verint.com/8-pricing-research-techniques)
Pricing Research Methods (http://www.moodia.com/article/pricing-research-methods)