Enroll Course: https://www.coursera.org/learn/uva-darden-bcg-pricing-strategy-cost-economics
Deciding how much to charge for your products or services is a critical decision for any business. Many companies default to cost-based pricing, but is this the most effective approach? The Coursera course, ‘Cost and Economics in Pricing Strategy,’ developed by the esteemed Darden School of Business at the University of Virginia and featuring experts from Boston Consulting Group, offers a comprehensive exploration of this fundamental question.
This course moves beyond simple cost calculations to delve into the economic principles that should underpin your pricing decisions. It meticulously breaks down the pros and cons of a cost-based strategy, equipping learners with a nuanced understanding of its limitations and potential pitfalls.
The syllabus is thoughtfully structured to build knowledge progressively. Week one, ‘Pricing Fundamentals,’ lays the groundwork by introducing essential economic concepts like cost variations and their impact on supply curves. It also provides a fascinating look at auctions, making even familiar platforms like eBay seem new and insightful.
Moving into week two, ‘Price Discrimination,’ the course tackles strategies for segmenting customers and tailoring prices to maximize profits. The concept of a ‘price and margin waterfall’ is introduced as a powerful tool for identifying revenue ‘leaks.’ The practical application is illustrated with the example of Heinz Ketchup, highlighting how package size influences consumption and pricing.
Week three, ‘Common Pricing Metrics: Elasticities,’ dives into the crucial area of demand modeling. Learners are guided through regressions, understanding their utility and how to calculate them in Excel. This knowledge is then applied to understanding three key types of elasticities – the relationship between demand and price – and the factors that influence them. The week culminates in price optimization based on these economic models, a skill that can significantly impress colleagues and clients.
Finally, week four, ‘Channel and Direct-to-Consumer Pricing,’ addresses pricing within supply chains and for direct sales. Concepts like double-marginalization, the time value of money, and customer lifetime value (CLV) are explained not just theoretically but with practical applications for improving pricing decisions. The course concludes with three techniques for direct-to-consumer pricing and a real-world case study of an online grocery service, Retail Relay, challenging learners to propose a pricing solution.
Overall, ‘Cost and Economics in Pricing Strategy’ is an invaluable resource for anyone involved in setting prices. Whether you’re a business owner, a marketing professional, or an aspiring economist, this course provides the practical knowledge and economic framework to make informed, profitable pricing decisions. The blend of academic rigor from Darden and real-world expertise from BCG makes this a highly recommended learning experience.
Enroll Course: https://www.coursera.org/learn/uva-darden-bcg-pricing-strategy-cost-economics