Pricing Policies-Lab

Pricing is one of the most important, least understood, and most controversial decisions a manager has to make. These decisions often have significant long-term implications for a firm's bottom line. The purpose of this course is to help future managers make good decisions by preparing them to analyze the environment in which their firm operates and to arrive at an appropriate pricing policy for their product or service. More specifically, the objectives of the course are: 1) to develop an understanding of the relationship between a firm's environment (e.g., cost, demand, competition, and legal aspects) and its optimal pricing strategy, and 2) to develop skills in applying this understanding. There are several components to the course: elasticity of demand and relevant costs, price discrimination and market segmentation, and competitive pricing. Students will learn the fundamentals of economic-value analysis and break-even analysis, and will be made familiar with strategies such as bundling, tie-in sales, quantity discounts, product-line pricing, and demand buildup. The course will cover ways of predicting competitor-pricing responses, and it will discuss a firm's legal environment as it pertains to pricing.