Cost and Economics in Pricing Strategy from Coursera

How much should you charge for your products and services? Traditionally, businesses have answered this question based on the cost to produce or provide their goods and services. This course shows you the economic factors behind pricing based on cost and the pros and cons of a cost-based pricing approach. Developed at the Darden School of Business at the University of Virginia, and led by top-ranked Darden faculty and Boston Consulting Group global pricing experts, the course provides the practical and research-based models and methods you need to set prices that maximize your profits.

By the end of this course, you’ll be able to:

--Apply knowledge of basic economics to make better pricing decisions

--Recognize opportunities for price discrimination—selling the same product at different prices to different buyers—and recommend strategies to maximize sales and profits

--Calculate three types of price elasticities to determine the impact of price on demand

--Analyze and apply different pricing models

-Cost-plus pricing

-Marginal cost-plus pricing

-Peak-load pricing

-Index-based pricing

--Evaluate the impact of channel intermediaries and customer lifetime value on pricing

What's inside

Syllabus

Pricing Fundamentals

Welcome to the first week of Cost and Economics in Pricing Strategy course! We'll begin our study of pricing by looking at some basic economic principles relevant to pricing, such as cost and cost variations and what that implies about the supply curve. Then we'll take a closer look at one pricing mechanism: auctions. You will never look at eBay the same!

Price Discrimination

This week we'll tackle three areas that will help you improve the effectiveness of your pricing strategy. First, we'll take a look at price discrimination and how to set prices for different customer segments to maximize profits. You'll learn about the price and margin waterfall and how creating one for your business can help identify "leaks" that you can prevent. Then we'll examine volume-based pricing, or pricing differently for different volumes to encourage consumption, of a consumer product: Heinz Ketchup. When we're done, you'll be very aware of the impact package size has on your own consumption--and how to use this knowledge to price products.

Common Pricing Metrics: Elasticities

This week we'll dive deep into the world of demand modeling. We'll start with a brief overview of regressions--what they are, why they're useful and how to calculate them using Excel. Then you'll get a chance to use regressions as you learn about three types of elasticities--relationships between demand and price or other factors--and the drivers of these elasticities. We'll finish with a price optimization based on demand models--a truly useful method for pricing based on economic factors. By the end of this week, you'll be able to impress your colleagues and friends with your knowledge of mathematical models and how to use them to inform your pricing strategy!

Channel and Direct-to-Consumer Pricing

Welcome to our final week together in this course! We'll finish by discussing key concepts related to channel pricing--or pricing through the supply chain. You'll learn about double-marginalization, time value of money, and customer lifetime value (CLV)--not only what they are, but how to use them to improve pricing decisions. Then we'll show you three different pricing techniques that you can use to improve direct-to-consumer pricing. You'll finish with a real-world case analysis of Retail Relay, an online grocery ordering and delivery service. You'll be able to recommend a viable approach to their pricing dilemma based on knowledge from this course. Enjoy!

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Provides learners strategies to capture more revenue through price control

Offers real-world, practical value

Covers common pricing models used in the industry

Emphasizes a cost-based pricing approach

Assumes basic economics knowledge

Requires understanding of cost variations

Reviews summary

Highly rated course covering pricing strategy

Learners say this largely positive pricing strategy course provides highly useful information that is easily applicable to real-world scenarios. The course materials are well organized, and the knowledgeable instructors present the content in a clear and engaging way. Students particularly appreciate the practical examples and case studies that illustrate pricing principles in action.

The course includes regular quizzes and assessments to help students test their understanding of the material.

"Control quizzes are really helpful to check own understanding."

"Quizzes are also challenging enough but not time-consuming to complete once you have revised the material for each question."

The course focuses on the basics of pricing strategy, making it a good choice for students who are new to the topic.

"Great course to start a journey into pricing optimization!"

"Good course to learn the basics of pricing"

"it is indeed a very beginning level."

The course is rigorous, but students who put in the effort will be well-rewarded.

"Challenging at times but full of detailed and valuable information."

The instructors are experts in their field and present the material in a clear and engaging way.

"Excellent course with top lecturers."

"Professors explains every topic in a very clear and practical way."

"I hope my economics teacher was like Ron Wilcox."

The course includes many practical examples and case studies that show how pricing principles can be applied in the real world.

"The example is clear to understand plus, the formula is well used along side with real life example."

"This course gets straight to the essence of the core concepts and formulas of pricing strategy."

"Content and instructors are clear and the final project properly reflects the material covered in the course."

The content in this course is in-depth and well-structured.

"It is a good course with a pretty cool explanations, the modules are so interesting and the knowledge can be applied in lots of markets and segments"

"The course is great. The last business case study was challenging and fun"

"An amazing course to learn more about price and the different methods of pricing"

The videos contain too many questions, which can be annoying.

"The only downside about this course is that there are too many questions in the videos"

Some students have reported that the quality of the course drops halfway through.

"While the beginning of the course was really interesting, the overall quality dropped halfway through."

Some students may wish there were more in-depth material available.

"I would also prefer links to more in-depth material for those who want to work beyond the confines of the curriculum (i.e. more info on how we derive to a demand function despite the topic being quite advanced)."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Cost and Economics in Pricing Strategy with these activities:

Review Course Materials Beforehand

Show steps

Set yourself up for success by reviewing the course syllabus, key concepts, and any pre-reading materials provided.

Browse courses on Pricing Strategy

Show steps

Read through the course syllabus and make note of key topics and assignments.
Preview lecture notes or videos to familiarize yourself with the course content.
Review any pre-assigned readings or articles to gain a foundational understanding of the subject matter.

Review the Basics of Microeconomics

Show steps

Start your learning journey by brushing up on fundamental microeconomic principles, enhancing your understanding of the concepts discussed in this course.

Browse courses on Microeconomics

Show steps

Revisit core principles of microeconomics, such as supply and demand, elasticity, and market equilibrium.
Solve practice problems related to microeconomic concepts to reinforce your understanding.

Compile a Resource List on Advanced Pricing Techniques

Show steps

Expand your knowledge beyond the course material by curating a collection of articles, videos, or other resources on cutting-edge pricing techniques.

Show steps

Conduct a web search or use a research database to identify relevant resources.
Categorize and organize the resources based on topic or technique.
Summarize key insights and trends from the resources in a brief report.

Five other activities

Expand to see all activities and additional details

Show all eight activities

Analyze Case Studies on Pricing Strategies

Show steps

Deepen your understanding of pricing theory by examining real-world case studies. This will help you apply concepts to practical business scenarios.

Show steps

Identify key elements of pricing strategies used in different case studies.
Analyze the impact of pricing decisions on business outcomes.
Develop recommendations for optimizing pricing strategies based on case study findings.

Share Your Pricing Insights with Peers

Show steps

Reinforce your understanding by actively teaching others. Engage in discussion forums, answer questions, or collaborate on projects related to pricing.

Show steps

Identify opportunities to participate in online forums or discussion groups.
Prepare responses to questions or share your thoughts on pricing-related topics.
Collaborate with peers on group projects or assignments that involve pricing analysis.

Connect with Pricing Experts

Show steps

Seek out professionals in the pricing field to gain insights, ask questions, and learn from their experiences.

Show steps

Attend industry events or webinars to connect with pricing experts.
Reach out to professionals on LinkedIn or other networking platforms.
Schedule informational interviews to learn from their career paths and expertise.

Develop a Pricing Simulation Model

Show steps

Gain hands-on experience by creating a simulation model to predict pricing outcomes. This will help you visualize and optimize pricing strategies.

Show steps

Identify key variables that influence pricing decisions.
Design a simulation model using spreadsheet software or specialized tools.
Run simulations to generate data on potential pricing outcomes.
Analyze simulation results and make recommendations for pricing optimization.

Present a Pricing Proposal to a Client

Show steps

Demonstrate your applied pricing knowledge by developing and presenting a comprehensive pricing proposal to a hypothetical client.

Show steps

Conduct market research to gather data on customer needs and industry benchmarks.
Develop a pricing strategy and supporting analysis.
Create a presentation that clearly articulates your pricing proposal.
Present your proposal to a mock client or receive feedback from peers.

Career center

Learners who complete Cost and Economics in Pricing Strategy will develop knowledge and skills that may be useful to these careers:

Revenue Manager

A Revenue Manager is a professional who is responsible for maximizing revenue for a business. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Revenue Manager

Pricing Analyst

A Pricing Analyst is a professional who analyzes pricing data to identify trends and patterns. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Pricing Analyst

Consultant

A Consultant is a professional who provides advice and guidance to businesses on a variety of topics, including pricing strategy. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Consultant

Financial Analyst

A Financial Analyst is a professional who analyzes financial data to make investment recommendations. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Financial Analyst

Product Manager

A Product Manager is a professional who is responsible for the development and marketing of a product. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Product Manager

Investment Banker

An Investment Banker is a professional who provides financial advice to businesses and governments. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Investment Banker

Portfolio Manager

A Portfolio Manager is a professional who manages investments for individuals and institutions. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Portfolio Manager

Project Manager

A Project Manager is a professional who is responsible for the planning, execution, and completion of a project. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Project Manager

Business Analyst

A Business Analyst is a professional who analyzes business processes and systems to identify areas for improvement. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Business Analyst

Sales Manager

A Sales Manager is a professional who is responsible for leading and managing a sales team. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Sales Manager

Account Manager

An Account Manager is a business professional who manages relationships with clients and ensures that their needs are met. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Account Manager

Data Analyst

A Data Analyst is a professional who collects, analyzes, and interprets data to identify trends and patterns. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Data Analyst

Supply Chain Manager

A Supply Chain Manager is a professional who is responsible for the planning, execution, and control of the supply chain. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Supply Chain Manager

Marketer

A Marketer is a professional who develops and executes marketing campaigns to promote products and services. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Marketer

Operations Manager

An Operations Manager is a professional who oversees the day-to-day operations of a business. They may also be responsible for developing and implementing pricing strategies. The Cost and Economics in Pricing Strategy course can help you develop the skills you need to be successful in this role by providing you with a deep understanding of the economic factors that affect pricing. You will also learn how to analyze and apply different pricing models to maximize profits.

See salaries and explore the career path for Operations Manager