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.
This course is part of the Pricing Strategy Optimization Specialization
Customer Value in Pricing Strategy
Offered By
University of Virginia
BCG
About this Course
22,687 recent views
Learner Career Outcomes
50%
started a new career after completing these courses
50%
got a tangible career benefit from this course
What you will learn
Customer value applications in pricing products
How to leverage core value-based pricing techniques to inform pricing decisions
How to measure customer willingness to pay using models (surveys, conjoint analysis, other data)
Consumer psychology applications in setting prices beneficial to both consumers and sellers
Skills you will gain
Customer Willingness to PayPricing StrategiesCustomer Value-based PricingMeasuring Customer PreferencesCustomer Psychology
Learner Career Outcomes
50%
started a new career after completing these courses
50%
got a tangible career benefit from this course
Shareable Certificate
Earn a Certificate upon completion
100% online
Start instantly and learn at your own schedule.
Course 2 of 4 in the
Flexible deadlines
Reset deadlines in accordance to your schedule.
Beginner Level
Some familiarity with business is helpful, but not required.
Approx. 21 hours to complete
Suggested: 4 week so study, 2-4 hours/week
English
Subtitles: English
Offered by
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
Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy.
Syllabus - What you will learn from this course
3 hours to complete
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.
3 hours to complete
13 videos (Total 71 min), 3 readings, 3 quizzes
13 videos
Three Lenses4m
Week 1 & Course Introduction2m
Consumer Decision Process: Involvement and Visibility3m
Mapping Purchase Processes10m
Customer Value and Value Drivers5m
Differentiating Customer Value by Customer Segment4m
Willingness to Pay and Demand Curves8m
Serving Consumers in Developing Economies8m
Story of Nano8m
Story of Ala9m
Pricing Strategies for Developing Economies1m
Week 1 Takeaways59s
3 readings
Course Overview & Requirements10m
Survey10m
Using Discussion Forums to Deepen Your Learning10m
3 practice exercises
Practice Quiz on Customer Value Basics21m
Practice Quiz on Customer Value in Developing Economies12m
Week 1 Understanding Customer Value Quiz30m
3 hours to complete
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!
3 hours to complete
11 videos (Total 62 min)
11 videos
Price to Demand Curve6m
Application of Price to Demand Curve: Price Piano6m
Application of Price to Demand Curve: Price Ladder6m
Application of Price to Demand Curve: Incentive Curves4m
Customer Value Drivers in a B2B Context3m
Value-based Price Setting for a New Product: Steps 1&26m
Value-based Price Setting for a New Product: Steps 3-510m
Price Elasticity: Intersection of Economics and Customer Value 17m
Price Elasticity: Intersection of Economics and Customer Value 26m
Week 2 Takeaways41s
4 practice exercises
Practice Quiz on Pricing to the Demand Curve18m
Practice Quiz on Pricing New Products9m
Practice Quiz on Pricing Based on Economics and Customer Value30m
Week 2 Implementing Value-based Pricing Quiz36m
4 hours to complete
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.
4 hours to complete
15 videos (Total 67 min), 1 reading, 4 quizzes
15 videos
Obtaining Willingness to Pay from Surveys6m
Interpreting Combined Survey Data6m
Case Intro: Adios Junk Mail58s
Case Debrief: Adios Junk Mail1m
Conjoint Analysis Applications4m
Why Conjoint?4m
Conjoint Analysis: Steps 1-38m
Conjoint Analysis: Step 4 and Product Preferences7m
Attribute Trade-offs2m
Attribute Importances4m
Conjoint Analysis: Willingness to Pay5m
Conjoint Analysis: Other Ways to Interpret Data3m
Conjoint Analysis: Propensity Modeling7m
Week 3 Takeaways1m
1 reading
Case: Adios Junk Mail1h 30m
4 practice exercises
Adios Junk Mail: Case Quiz15m
Practice Quiz on Obtaining WTP from Surveys12m
Practice Quiz on Conjoint Analysis18m
Week 3 Measuring Customer Preferences Quiz36m
5 hours to complete
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.
5 hours to complete
15 videos (Total 78 min), 1 reading, 5 quizzes
15 videos
Mental Accounting and Price Perceptions6m
Money Is Not Money4m
What We Can Learn from Ginsu Knives6m
Integrating Losses7m
Minimizing Losses and Give a Win with a Loss6m
Considering Consumer Price Perceptions: The Framing Effect4m
Gain and Loss Frames in Pricing2m
The Pain of Paying3m
Separate the Pain of Paying from Consumption6m
Anchoring and Price Primacy5m
Visual Tricks, Free as a Special Price, and Hedonic Bundling9m
Price Decoy6m
Applying the Customer Value Lens: Subscription Pricing4m
Week 4 Takeaways & Course Wrap-up1m
1 reading
Case Debrief Videos10m
4 practice exercises
Practice Quiz on Mental Accounting8m
Practice Quiz on Consumer Price Perceptions9m
Practice Quiz on Mental Shortcuts that Affect Pricing10m
Week 4 Consumer Psychology Quiz30m
Reviews
4.8
TOP REVIEWS FROM CUSTOMER VALUE IN PRICING STRATEGY
by VYFeb 18, 2018
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
by RSJun 4, 2017
Wonderful course! If I had some idea how to price regarding economic concepts - then this course gives me completely new very practical methodologies!
by FRMay 20, 2019
Excellent course. I would recommend to improve the level of the exercises and provide additional readings for people that already have some experience
by AGMar 17, 2020
This is the best course by far in the specialization. A lot of new things for me to learn. Absolutely loved it.
by FHJul 11, 2019
Great course!! I learnt a lot. The Conjoint Analysis module proved particularly useful to my activities.
by KDDec 29, 2019
Very good course for neophyte who wants to understand the customer values for pricing
by RSJan 14, 2018
Very rich content on consumer behavior and present powerfull tools to measure WTP
by VTJul 14, 2019
Full of important pricing concepts which is immediately applicable into practice.
by HAFeb 8, 2018
Great way to learn conjoint and marketing research fundamentals
by MCMay 16, 2019
Good to have this course to increase my learning education
by MSDec 27, 2017
Excellent course. All the instructors did a great job.
About the Pricing Strategy Optimization Specialization
In this Specialization, we show you techniques to increase price realization and maximize profits. Learn from Boston Consulting Group's global pricing experts and University of Virginia Darden School of Business faculty, who share the frameworks, tips and tools we use in our business and research environments. We will look at pricing through BCG's proprietary and time-tested three “lenses”—cost and economics, customer value, and competition—to build your understanding of the strategic power of pricing. You’ll leave the Specialization with a portfolio-building presentation that demonstrates your ability to price strategically.
Frequently Asked Questions
When will I have access to the lectures and assignments?
Once you enroll for a Certificate, you’ll have access to all videos, quizzes, and programming assignments (if applicable). Peer review assignments can only be submitted and reviewed once your session has begun. If you choose to explore the course without purchasing, you may not be able to access certain assignments.
What will I get if I subscribe to this Specialization?
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
What is the refund policy?
Is financial aid available?
More questions? Visit the Learner Help Center.