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 |
| Commitment | 4 week so study, 2-3 hours/week |
| Language | English |
| How To Pass | Pass all graded assignments to complete the course. |
| User Ratings |
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
- Video: Pricing Specialization Overview
- Video: Three Lenses
- Discussion Prompt: Where do you see examples of the three lenses at work?
- Video: Module & Course Introduction
- Reading: Course Overview & Requirements
- Reading: Survey
- Reading: Using Discussion Forums to Deepen Your Learning
- Discussion Prompt: Meet and Greet
- Video: Consumer Decision Process: Involvement and Visibility
- Video: Mapping Purchase Processes
- Video: Customer Value and Value Drivers
- Video: Differentiating Customer Value by Customer Segment
- Video: Willingness to Pay and Demand Curves
- Practice Quiz: Practice Quiz on Customer Value Basics
- Video: Serving Consumers in Developing Economies
- Video: Story of Nano
- Video: Story of Ala
- Discussion Prompt: Lessons from Unilever and Tata
- Video: Pricing Strategies for Developing Economies
- Practice Quiz: Practice Quiz on Customer Value in Developing Economies
- 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
- Video: Module Introduction
- Video: Price to Demand Curve
- Video: Application of Price to Demand Curve: Price Piano
- Video: Application of Price to Demand Curve: Price Ladder
- Video: Application of Price to Demand Curve: Incentive Curves
- Video: Customer Value Drivers in a B2B Context
- Practice Quiz: Practice Quiz on Pricing to the Demand Curve
- Video: Value-based Price Setting for a New Product: Steps 1&2
- Video: Value-based Price Setting for a New Product: Steps 3-5
- Practice Quiz: Practice Quiz on Pricing New Products
- Video: Price Elasticity: Intersection of Economics and Customer Value 1
- Video: Price Elasticity: Intersection of Economics and Customer Value 2
- Practice Quiz: Practice Quiz on Pricing Based on Economics and Customer Value
- 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
- Video: Module Introduction & Overview of Methods to Assess WTP
- Video: Obtaining Willingness to Pay from Surveys
- Video: Interpreting Combined Survey Data
- Video: Case Intro: Adios Junk Mail
- Reading: Case: Adios Junk Mail
- Video: Case Debrief: Adios Junk Mail
- Practice Quiz: Practice Quiz on Obtaining WTP from Surveys
- Video: Conjoint Analysis Applications
- Video: Why Conjoint?
- Video: Conjoint Analysis: Steps 1-3
- Video: Conjoint Analysis: Step 4 and Product Preferences
- Video: Attribute Trade-offs
- Video: Attribute Importances
- Video: Conjoint Analysis: Willingness to Pay
- Video: Conjoint Analysis: Other Ways to Interpret Data
- Video: Conjoint Analysis: Propensity Modeling
- Practice Quiz: Practice Quiz on Conjoint Analysis
- 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
- Video: Module Introduction
- Video: Mental Accounting and Price Perceptions
- Video: Money Is Not Money
- Video: What We Can Learn from Ginsu Knives
- Video: Integrating Losses
- Video: Minimizing Losses and Give a Win with a Loss
- Practice Quiz: Practice Quiz on Mental Accounting
- Video: Considering Consumer Price Perceptions: The Framing Effect
- Video: Gain and Loss Frames in Pricing
- Video: The Pain of Paying
- Video: Separate the Pain of Paying from Consumption
- Practice Quiz: Practice Quiz on Consumer Price Perceptions
- Video: Anchoring and Price Primacy
- Video: Visual Tricks, Free as a Special Price, and Hedonic Bundling
- Video: Price Decoy
- Practice Quiz: Practice Quiz on Mental Shortcuts that Affect Pricing
- Reading: Case Debrief Videos
- Video: Applying the Customer Value Lens: Subscription Pricing
- Video: Module Takeaways & Course Wrap-up
Graded: Value-based Pricing
Graded: Week 4 Consumer Psychology Quiz
FAQs
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University of Virginia
A premier institution of higher education, The University of Virginia offers outstanding academics, world-class faculty, and an inspiring, supportive environment. Founded by Thomas Jefferson in 1819, the University is guided by his vision of discovery, innovation, and development of the full potential of students from all walks of life. Through these courses, global learners have an opportunity to study with renowned scholars and thought leaders.
BCG
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy.
We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit bcg.com.
Pricing
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Ratings and Reviews
The instructors use the real world scenarios in the simplest possible way to be understood , and tell you the to the point concepts involved in these business scenarios
Great way to learn conjoint and marketing research fundamentals
I found very upsetting that all of the peer reviewed asigments that i rated (5) were for the Trail Blazer case as i was expecting to see at least 1 work of someone that picket the Mutual Fund case so i could compare it to the work that i have done.
It would have been better if it was given us the choice to pick what to correct instead of giving us 3 random works.
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SG
Excellent course. Well delivered with a touch of humor.