Lecture Notes

This section contains the listing of topics discussed, as well as assigned questions that are discussed in case sessions. There is no substitute for reading the case fully before the case discussion.

Week # Topics Questions
1 Lecture: Introduction: Pricing Strategies - the Good, the Bad and the Ugly
2 Lecture: Economic Value to the Customer

Case: Exploring EVC
Cumberland Metal Industries Case

1) What price would you charge for the Cumberland Pad?

2) What factors were important in arriving at this decision?
3 Lecture: Measuring Demand and influencing Consumer Behavior: A Practical Approach to Pricing a New Product

Case: Pricing a Product for the First Time
Virgin Mobile U.S.A. Case

3) Given Virgin's target market how should it structure its pricing?

4) How confident are you that this pricing scheme will be successful? Provide financial evidence.

5) What do you think of Virgin's value proposition?
4 Lecture: How to Price to Best your Competitors?

Case: How to React to a Price Cut?

Case: When is Price-Cutting a Good Idea?
Beauregard Textiles Case

6) What price should Beauregard Textile Company announce for Tri-axx-30? $3.00 or $4.00 per yard?

7) What is the total contribution under the present arrangement?

8) What happens if the price were dropped to $3?

9) Calhoun and Pritchard is presumably showing a loss at $3.00. Why don't they raise their prices?

10) What happens to Calhoun and Pritchard if Beauregard drops prices?

11) How can Beauregard get C&P to raise prices without violating any antitrust regulations?

Philip Morris: Marlboro Friday Case

12) Should Philip Morris (PM) have cut prices? What alternative strategy could they have used?

13) Having cut prices, what should they do now?
5 Lecture: The Basic Theory of Segmentation

Case: Product Line Pricing
American Airlines Revenue Management Case

14) Refer to the discussion of the Chicago-West Coast pricing decision in the case. Should American counter Continental's $159 fare with a relatively unrestricted discount fare on the nonstop Chicago-West Coast flights?

15) Refer to the discussion of the New York-San Juan pricing decision in the case. What additional information should Doug Santoni collect to decide on a response to Eastern's pricing initiative?
6 Lecture: Customizing Prices in Multiple Ways

Case: Pricing in the Marketing Mix
Keurig Case

16) Should Keurig use a single K-Cup for all markets or should it launch the Keurig Cup in the at-home market and continue to the K-cup in the commercial market?

17) What price for a brewer and for the portion pack (K-cup/Keurig-Cup) do you recommend? Under your pricing strategy, how profitable are coffee sales for Keurig? How do coffee profits affect the brewer price?