Customer Value in Pricing Strategy

Go to Course: https://www.coursera.org/learn/uva-darden-bcg-pricing-strategy-customer-value

Introduction

### Course Review: Customer Value in Pricing Strategy on Coursera If you're looking to enhance your understanding of pricing strategies through the lens of customer value, the course **Customer Value in Pricing Strategy** offered by the Darden School of Business on Coursera is a commendable choice. Pricing is often an overlooked element of business strategy, yet it can be a potent driver of revenue when implemented correctly. This course delves into the nuances of how understanding customer value can significantly sharpen your pricing strategy and optimize your sales. #### Course Overview The course aims to revolutionize your approach to pricing. Rather than relying solely on traditional cost-based pricing models, it emphasizes the necessity of understanding what customers are willing to pay. The curriculum is designed to arm you with the psychological tools and frameworks needed to develop effective, value-based pricing strategies. This alignment with customer expectations is crucial for maximizing revenue and sales. #### Syllabus Breakdown 1. **Understanding Customer Value** - The course kicks off with foundational concepts surrounding **customer value**. You will gain insights into how consumers make purchase decisions and the significance of their willingness to pay (WTP). The lessons provided here will also touch upon the challenges of value-based pricing in emerging markets, enhancing your global perspective on pricing strategies. 2. **Implementing Value-based Pricing** - Building on the first week, you will learn specific techniques to manipulate value-based pricing effectively. Tools like the **price piano**, **price ladder**, and **incentive curves** will be introduced. An emphasis on B2B pricing will prepare you to develop competitive pricing strategies for new products amidst varying customer value drivers. 3. **Measuring Customer Preferences** - Understanding WTP is pivotal in shaping your pricing strategy. This week teaches you measurable techniques such as **surveys** and **conjoint analysis** to gauge customer preferences accurately. Practical application is emphasized, as shown through case studies like Adios Junk Mail, which used surveys to refine customer insights. 4. **Considering the Human Nature of Customers** - The final week leverages the psychological aspects of pricing. You’ll explore consumer behavior and mental accounting principles influencing purchasing decisions. A practical case study on the Portland Trailblazers, alongside Fidelity Investments, will solidify your grasp of applying psychological principles to real-world pricing challenges. #### Course Pros - **Engaging Content**: The course combines theoretical insights with real-world applications, making it engaging and pertinent. - **Expert Instructors**: The expertise of instructors Ron and Thomas from Darden School brings a depth of knowledge and practical experience. - **Flexibility**: The online format of Coursera allows you to learn at your own pace, accommodating your schedule. - **Comprehensive Syllabus**: Each week builds upon the last, ensuring a thorough comprehension of the subject matter. #### Course Cons - **Time-Intensive**: Some participants might find the material dense, requiring more time to absorb concepts fully. - **Limited Interaction**: As an online course, the interaction with peers could be somewhat limited compared to in-person learning. #### Conclusion and Recommendation In conclusion, **Customer Value in Pricing Strategy** is an invaluable resource for anyone looking to refine their pricing strategies through a customer-centric approach. Whether you're a marketing professional, product manager, or entrepreneur, the insights gained from this course can be transformative in how you approach pricing. I wholeheartedly recommend this course for its practical application of psychology and customer value principles that will undoubtedly lead to smarter pricing strategies and elevated sales outcomes. Dive into this course, and prepare to unlock a deeper understanding of how to align pricing with customer value to optimize your business performance!

Syllabus

Understanding Customer Value

Welcome to Week 1! We kick off the week with an overview of the course so that you'll know what to expect with an optional review of the specialization and three pricing lenses (watch these if you want a refresher). Then we'll dive into the content! This week, you'll learn about customer value--what it is and its relevance to pricing. You'll see how consumers make decisions--and why knowing consumers' willingness to pay is so important when setting a product's price. Next, we'll take a look at customer value in developing economies and how and why companies succeed (or not!) with value-based pricing in these markets. You'll finish the week with a solid understanding of "customer value" and how that impacts pricing strategy.

Now that you have an understanding of customer value, let's dive into value-based pricing in greater depth. This week, we'll show you how to price to the demand curve using three tools: the price piano, the price ladder, and incentive curves. We'll take a look at customer value drivers in a B2B context and walk through a process to price a new product. Then Ron and Thomas will show you how price elasticity plays into value-based pricing. Implementing value-based pricing requires detailed analysis. Let's get started!

As you learned in Week 1, understanding customer willingness to pay (WTP) is critical for effective pricing. This week, we'll show you two ways to measure willingness to pay: surveys and conjoint analysis. You'll see how one company, Adios Junk Mail, used surveys to better understand WTP. Conjoint is a terrific tool, and we'll walk you through how it's used to determine product preferences and prices. You'll finish the week with a solid understanding of how to measure customer preferences and use this information in your pricing strategy.

Last week you considered pricing using a rational utility model. But humans are not always rational beings--and your pricing strategy needs to consider other behavioral drivers. We'll look at the psychology behind consumer purchase decisions and the mental accounting that impacts those decisions. Next we'll consider consumer price perceptions and ways to frame prices and create better deals and discount plans that work for both the consumer and the seller. Then, we'll take a look at two real-world cases, the Portland Trailblazers and Fidelity Investments so that you can practice using tools from throughout the course in a real-world case. You'll finish the course with fresh insights into value-based pricing and its applications.