In this course we covered quite a lot of ground.
In week number one we looked specifically at the importance of pricing.
I wanted to transmit especially the importance for
pricing on the bottom line and I hope you kept in your mind that clearly pricing is
the most important driver of profitability for any organization.
At the same time we looked as well at the complexity of pricing and
especially our interview with Felix
I think enlightened us a little more about
the difficulty of implementing pricing decisions in the real world.
We have looked as well at some more basic concepts of pricing, or
fundamental concepts of pricing, such as price elasticity.
A concept that is very often used as well in the economics literature.
In the second week we then focused on different methodologies on
how to determine prices.
More specifically we looked at cost based pricing competition and
customer based pricing.
I hope it has become clear, as well, that cost and
competition pricing is used quite often in industry.
Nevertheless, there are significant shortcomings as well,
to both of these methodologies.
Hence, we focus the rest of this week primarily on customer-based pricing and
more specifically, try to identify.
Different ways in order to figure out, what is the willingness to pay
of our customers, or said differently, what is the perceived value for
the products and services that we are offering, by our customers.
This obviously gives us way in order to figure out what is the optimal price, and
optimal price might be the one that actually maximizes our volume or
market share.
It might be the price that maximizes our revenue or sometimes,
it might be the price that actually maximizes our profitability.
And yeah, we should always keep in mind, but companies are out there
in order to typically maximize the profits, at least in the long run.
In the third week, we then looked at playing the pricing piano or
said differently, price discrimination.
Because what we see in the real world is that companies don't only charge one price
for all their products, but typically they set different prices for
different products with respect to different customer segments.
We try to look at benefits of price discrimination and
we have seen that obviously there's significant revenue and
profit potential behind price discrimination.
We then try to figure out what are the different ways in order to ensure
to implement price discrimination.
And we have seen multiple approaches in order to do this,
in order to make sure that it can charge one price to one segment.
But at the same time, another price to another customer segment.
In the last and fourth week we looked at pricing psychology.
Essentially who could say this is the way how we can manipulate customers.
Manipulate customers in a way that they perceive a higher value in the products
and services that we deliver or the same time that they feel less pain in
purchasing our products or paying a certain price.
So again, in this week,
we looked at multiple ways in order to influence our customers so
that in the end, we can maximize our sales, revenues, and profitability.
I really hope that you enjoyed this course and
hopefully going to enjoy some of our other courses in this specialization.
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