Business Strategy & Management

Pricing Differentiation, Methods & Strategy

This course will address the most important pricing strategies used by firms in practice. Participants will be exposed to more sophisticated pricing techniques encountered in the real world. A well-designed pricing strategy can substantially increase the profits of a firm.

Course Outlines

• Uniform Pricing: The simplest pricing strategy for the firm is to charge a single price per unit to all customers, also known as uniform pricing.
• First-Degree Price Discrimination: consists of charging a different price per unit to each customer. Some car dealers and Internet sites practice an imperfect form of first-degree price discrimination.
• Second-Degree Price Discrimination: consists of offering different price schedules and then letting customers decide the terms that suit them best. The most important examples of second-degree price discrimination are the following: block pricing and two-part pricing. Quantity discounts, cover charges at bars, telephone plans, etc., are the examples.
• Third-Degree Price Discrimination: consists of dividing customers into groups according to some observable characteristic, and then charging a different price per unit to each group of customers. Airline pricing, hotel and movie theater discounts to senior citizens, coupons, etc., are examples of this pricing strategy.
• Bundling: consists of selling multiple products as a bundle, instead of selling them separately. Combo meals, vacation packages, bundles of premium channels, etc., are the examples.
  

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