Overview
Price is the only component of the marketing mix that generates revenue for the firm. The remaining P’s (product, place, and promotion) are costly activities undertaken to create value for the consumer. Price, in its ideal form, recaptures this value. Yet, most companies adopt very simple heuristics, or “rules of thumb,” for setting prices, often divorced from firm strategy and economic reality.
This module will introduce participants to frameworks relevant for making informed pricing decisions. While pricing strategies are taught under the rubric of many diverse disciplines, we will take an integrative approach, combining strategic, economic, marketing, and psychological considerations. Pricing decisions require a synthesis of economic and marketing principles, an appreciation of legal and ethical constraints, and the ability to use accounting, financial, and market research data.
In this module we will discuss concepts like:
- Pricing strategies and tactics
- The Value Framework
- Customer value line
- Price elasticity
- Markup and profit margin
- Break-Even analysis
- Price bundling
- Price promotions
Faculty
Michael Tsiros is a Patrick J. Cesarano Professor of Marketing and Chairman of the Marketing Department at Miami Herbert Business School. His research interests focus on the role of customer satisfaction, behavioral pricing and price promotions, symbolic brand associations, and cause-related marketing. His articles have appeared in several leading journals including Journal of Marketing Research, Journal of Consumer Research, Journal of Marketing, Organizational Behavior and Human Decision Processes, Journal of Retailing, and Journal of the Academy of Marketing Science. His research has been widely cited and has won awards for its impact in the field. He has also received awards for his reviewing. He has been selected as a thought leader in retailing recently and his research has been featured in Harvard Business Review and The Economist.
