MKTG 4825 Pricing Strategies and Channel Management Yacheng Sun Welcome!
Prerequisites • BCOR 2400 • MKTG 3250: Buyer Behavior • MKTG3350: Marketing Research
About me (Sun) • Education • MA in Economics • PhD Marketing • Research Interests • Empirical consumer decision models • Pricing strategy • Product design and product recommendation strategy • Consulting Experiences • Online movie rental • Loyalty program • Online Leads Generation Service (open/close circuit)
Logistics • Email: Yacheng.Sun@Colorado.edu (Best bet) • Office Phone: 303-492-6211 (Good luck) • Office: KOBL 461 • Office hours: • 10:00am – 12:00pm Tuesday/Thursday • and by appointment • Teaching Assistant: Hilarie Nickerson
Logistics • Class Webpage http://leeds-faculty.colorado.edu/ysun/MKTG4820_2.html • Course objectives • Milestone dates • Grading Criteria • Downloads
Materials • Text Nagle, Thomas T. & Hogan, John E. (2006), The Strategy and Tactics of Pricing: A Guide to Growing More Profitably, Fourth Edition, Prentice-Hall, Upper Saddle River, NJ. • Supplementary Lecture Slides • Additional Reading Assignments
Course Objectives • Understanding various formats of pricing strategy. • Understanding of various factors that influence the design and execution of pricing strategy. • Develop abilities to conduct theoretical/empirical analysis in order to design the optimal pricing strategy. • Understand the intricacies of channel conflict and analytical solutions of channel coordination.
We will integrate pricing and channel strategies in this course Pricing strategies “Discrete” More costly Shorter term “Continuous” Less costly Longer term Channel strategies
Examples of questions that will be addressed in this class • Why does Bestbuy.com charge $xxx.99 for most of its electronic products? • What is the rationale behind the “Value Meals” offered in KFC (and Burger King, McDonald's) ? • Who are the airline passengers that are most likely to get bumped? • Why does a simple revenue sharing agreement is able to increase the video rental industry revenue by 6.2% in the first year?
This Course Values Rigor A quote to share • Some people are born great • Some achieved greatness • Some have greatness thrust upon them… - Shakespeare, Twelfth Night
This Course Values Rigor • Some people are born great • Some achieved greatness • Some have greatness thrust upon them… - Sun math proficient math proficiency math proficiency And… there are others… - Harvey Trumpet
Some of the “hard skills” you will learn • Analytically identify optimal price point(s) using • Basic data manipulation and visualization using Excel • Empirical estimation of demand curve using Excel • Formulate and solve optimal pricing strategies using Excel Solver
Grading • Exams: 600 pts (200 pts X 3) • Team project: 300 pts • Attendance scores: 100 pts • Participation scores: 50 pts
Exams • All exams are close book • Exam dates • Exam 1 February 11th (Thursday) • Exam 2 March 16th (Tuesday) • Exam 3 May 4th (Tuesday) 15th (Monday) December 13th (Saturday) • Final Exam is cumulative
Team Project • Team project is worth 300 pts • Team formation: 4-5 persons formed by self-selection • Evaluation: Two-part grading • Fixed part: 50% • Variable part 0-50%: Peer evaluation • How this works
More on Team Project • Team formation: 4-5 persons formed by self-selection • Team work norm should be fair and flexible. • Report to me early if there is any coordination issue.
Attendance Score • Attendance score is 100 pts • Six to eight “random” quizzes used for keeping attendance
Participation Score • Participation score is 50 pts • I Will cold-call • There is usually no “correct answer” for a question • Your input will be evaluated based on • Deliberation and quality of comments • Contribution to the learning atmosphere
Disability and Religion Observances • Will do my best to accommodate. • Let me know early - no last-minute surprises please. • Supporting documents needed. • e.g., a letter from Disability Services (303) 492-8671, Willard 322, www.Colorado.EDU/disabilityservices
Classroom Norms • Be on time for class! • Cell phones and pagers need to be turned off during class time. • NO use of laptop in the classroom unless instructed. • No other non-academic activities in the classroom.
Deliverable for This Meet • A one-minute paper for my better understanding of your • academic standing • career interests • expectations for the class
Deliverables for Next Meet • Think about the answers to the questions. • Bring a name card for display in class
Remember: Pricing and channel management take much more than pure luck Price is right Video Work hard because you do not expect to be as NEARLY lucky as her!