Pricing Strategy MGT 555
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This 8 page Class Notes was uploaded by Katherine Spencer on Thursday October 29, 2015. The Class Notes belongs to MGT 555 at Yale University taught by Subrata Sen in Fall. Since its upload, it has received 16 views. For similar materials see /class/231015/mgt-555-yale-university in Business, management at Yale University.
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Date Created: 10/29/15
YALE UNIVERSITY School of Management PRICING STRATEGY MGT 555a Fall 2008 INSTRUCTOR Subrata Sen OFFICE Room 221 52 Hillhouse Ave Steinbach Hall OFFICE HOURS By Appointment PHONE 203 4326028 FAX 203 4320342 EMAIL ADDRESS subratasenyaleedu SECRETARY Carla Mills Room 004 55 Hillhouse Ave Horchow Hall 4325957 carlamillsyaleedu REQUIRED MATERIAL Nagle Thomas T and John E Hogan The Strategy and Tactics of Pricing Upper Saddle River NJ PrenticeHall Inc Fourth Edition 2006 henceforth abbreviated as NAGLE Packet of Required Readings SCHEDULE Sep 3 INTRODUCTION 1 NAGLE Chapters 1 and 2 Sep 8 EFFECTS OF COSTS ON PRICING DECISIONS l NAGLE Chapters 8 and 9 2 PROBLEM SET ON COSTS prepare for class discussion 3 CASE ANALYSIS Computron Inc 2006 Sep 10 Sep 15 Sep 17 Sep 22 Sep 24 LEGAL AND ETHICAL ASPECTS OF PRICING 1 NAGLE Chapter 14 2 PriceFixing Vignettes Harvard Business School 3 CASE ANALYSIS GlaxoSmithKline and Access to Essential Medicines A EFFECTS OF DEMAND ON PRICING DECISIONS 1 CASE ANALYSIS American Repertory Theatre SEGMENTED PRICING 1 BUNDLING 1 NAGLE pp 72 75 2 Simon Hermann Martin Fassnacht and Georg Wubker Price Bundling Pricing Strategy amp Practice Vol 3 No 1 1995 pp 3444 3 KODAK FILM BUNDLING PROBLEM prepare for class discussion SEGMENTED PRICING II TWO PART PRICING AND QUANTITY DISCOUNTS 1 NAGLE pp 6972 2 Notes on TwoPart Pricing 3 PROBLEM SET ON TWOPART PRICING AND QUANTITY DISCOUNTS prepare for class discussion MEASUREMENT OF DEMAND 1 NAGLE Chapter 13 2 Jones D Frank quotA Survey Technique to Measure Demand Under Various Pricing Strategiesquot Journal of Marketing Vol 39 July 1975 7577 3 DEMAND FORECASTING PROBLEM SET prepare for class discussion Sep 29 Oct 1 Oct 6 Oct 8 Oct 13 Oct 15 DEMAND MEASUREMENT IN PRACTICE Presentation MarketStrategies International SEGMENTED PRICING III PRODUCT LINE PRICING I l Dolan Robert J and Hermann Simon Power Pricing The Free Press 1996 pp 190221 2 quotIS CHICKEN A GOOD LOSS LEADERquot PROBLEM prepare for class discussion 3 TELEPHONE PRICING PROBLEM prepare for class discussion PRODUCT LINE PRICING II 1 CASE ANALYSIS Cambridge Software Corporation SEGMENTED PRICING IV TEMPORAL PRICE DISCRIMINATION l NAGLE pp 6669 124136 SALES PROMOTION 1 1 NAGLE pp 252 257 2 PROBLEM ON PROMOTIONS prepare for class discussion SALES PROMOTION II 1 NAGLE pp 241252 257262 2 CASE ANALYSIS Reynolds Metals Company Consumer Products DiVision Oct 27 Nov 10 Nov 12 Nov 17 PRICING AND COMPETITION I 1 NAGLE Chapter 10 2 Besanko David David Dranove Mark Shanley and Scott Schaefer Economics of Strategy John Wiley and Sons Inc Third Edition 2004 pp 3539 3 CASE ANALYSIS Southwest Airlines PRICING AND COMPETITION II COMPETITIVE BIDDING AND AUCTIONS 1 Pricing and Market Making on the Internet 2 CASE ANALYSIS Onsale Inc PRICING AND COMPETITION III ART AUCTIONS Presentation Will Goetzmann Yale University PRICING OF NEW PRODUCTS AND LIFE CYCLE PRICING 1 NAGLE Chapters 3 and 12 2 CASE ANALYSIS The Medicines Company PRICING IN THE PUBLIC SECTOR 1 Brown Stephen J and David S Sibley The Theog of Public Utility Pricing Cambridge University Press 1986 pp 2644 PRICING OF NEW PRODUCTS TWOSIDED MARKETS 1 Eisenmann Thomas Geoffrey Parker and Marshall W Van Alstyne Strategies for TwoSided Markets Harvard Business Review October 2006 2 CASE ANALYSIS XM Satellite Radio A PRICING STRATEGIES IN PRACTICE Presentation Flexcar Nov 19 Nov 24 Dec 1 Dec 3 Dec 8 10 INTERNATIONAL PRICING 1 Dolan Robert J and Hermann Simon Power Pricing The Free Press 1996 pp 141 163 2 CASE ANALYSIS MediCult Pricing a Radical Innovation PRICING AND THE MARKETING MIX I 1 Dolan Robert J How Do You Know When the Price is Right Harvard Business Review Vol 73 No 5 SeptemberOctober 1995 pp 174183 2 Ofek Elie Customer Pro tability and Lifetime Value 3 CASE ANALYSIS Virgin Mobile USA Pricing for the Very First Time PRICING AND THE MARKETING MIX II 1 CASE ANALYSIS Keurig At Home PSYCHOLOGICAL ASPECTS OF PRICING 1 NAGLE Chapter 5 2 Anderson Eric and Duncan Simester Mind Your Pricing Cues Harvard Business Review Vol 81 No 9 September 2003 pp 96103 TERM PROJECT PRESENTATIONS COURSE RE UIREMENTS CASE REPORTS 40 I 39uJ Four ofthe following six cases have to be at 8 15 am on the day they are discussed in class You are encouraged to work in groups However each student should submit an individual report Your report should not exceed three doublespaced typewritten pages excluding graphs and tables Late 39 39 39 will not be accepted a American Repertory Theater due September 15 2008 b Cambridge Software Corporation due October 6 2008 c Reynolds Metals Company Consumer Products Division due October 15 2008 d Southwest Airlines due October 27 2008 e The Medicines Company due November 5 2008 f MediCult Pricing a Radical Innovation due November 19 2008 The remaining cases are to be prepared for class discussion Again you are encouraged to work in groups GROUP TERM PROJECT 35 A detailed description of the project is provided in the next two pages CLASS PARTICIPATION 25 GROUP TERM PROJECT The objective of this project is to gain some real life experience in analyzing pricing strategies and tactics It provides each group a chance to go beyond the class to address an issue in pricing that has particular signi cance to them Each team should choose a product a product category a company or an industry and document and analyze its pricing strategies and tactics Each group is required to submit a written report and present its findings to the class Please contact a suitable organization to examine how practitioners approach the pricing problem You would not only describe the process but would also critically evaluate the process and draw managerially relevant conclusions The following list contains a set of issues that could be considered in your term paper However you are not limited to these issues In general you should focus your analysis on only a few selected issues 39 quot 39 39 between Costs and Pricing Decisions39 What types ofrelevant costs have major impact on pricing decisions 0 Price Sensitivity Are consumers sensitive to price changes What are the major factors affecting price sensitivity How do companies take consumers39 price sensitivity into account in their pricing decisions 0 Price Discrimination Strategy Does the companyindustry practice price discrimination strategies What are the most common types of price discrimination Why does the firm choose those particular types 0 Competitive Pricing Strategy What are the major types of competitive pricing strategies How do firms compete in the industry and how do they in uence the competitive pricing decisions of others In your opinion why do firms use these strategies 0 New Product PricingProduct Line Pricing How does the firm set prices for its new products or decide prices for its product lines Please submit your project team compositions four members per team by September 22 m contact me if you are having difficulty in forming a team The next step is to submit a twopage description of your project by October 13 2008 This description should provide the names of the productcompanyindustry you are going to study the major issues that you are interested in and the information sources that you will use An interim report not to exceed four doublespaced pages is due on November 11 2008 This interim report should contain your analysis of the competitive structure of the industry that you are studying and report on the pricing practices existing in the industry obtained both from secondary sources and from interviews with relevant managers The nal report is due on December 10 2008 This report should not exceed ten double spaced pages not including Tables and J39 I It should be organized as follows 1 Industry analysis 2 Speci c Pricing Problems Being Studied 3 Pricing Practices Existing in the Industry 4 Critical Analysis of Existing Pricing Practices 5 Managerial Recommendations You will present your ndings to the class on either December 8 or December 10 2008 J at both these sessions is mandatorv Please don t hesitate to set up group meetings with me while you are working on the project Summa of Due Dates Team Composition September 22 Project Description October 13 Interim Report November 11 Presentation December 8 or 10 Final Report December 10