5. Pricing

1. pricing should complement company's marketing strategy

2. don't use cost+ pricing

3. range of feasible price: EVC (Economic Value to Customer)

4. best price from the range: 

-demand analysis and profit maxinmization

-competitor's strategy

5. methods to access willingness to pay (price sensitivity)

• expert judgement

• customer surveys

• conjoint analysis

• price experiments 

• analysis of historical market data

6. elasticity pricing

7. historical data: choice model

8. conjoint analysis

9. price discrimination: 

look for variation in the way customers value the product,  offer price schemes targeted to different segments

10. pricing psychology

• anchoring: 

a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

• reference price

-framing

-endownment: the hypothesis that people ascribe more value to things merely because they own them

-order effect

11. summary:

pricing factors