Adapted from Marc Cosentino’s Case In Point, 8th Edition, pages 115-118:
The client is a large pharmaceutical company that has discovered a cure for baldness and thinning hair. It is a pill that will restore a full head of hair in three months. The pill needs to be taken every day to maintain the hair’s thickness. Estimate the size of the US market and tell me how you would price the drug.
Adapted from Nagle, Hogan, and Zale’s The Strategy and Tactics of Pricing, 5th Ed., Chapter 4
Value-based pricing strategies fail unless potential customers recognize and understand the value of your products and services and how they differ from those of your competitors. Clear value and price communication can protect your value proposition from competitive encroachment, improve willingness-to-pay, and increase the likelihood of purchase. Effective messages cater to both different types of products and different stages of the buying process.
Adapted from Nagle, Hogan, and Zale’s The Strategy and Tactics of Pricing, 5th Ed., Chapter 1
Many factors determine profitability:
Pricing strategy must take these factors into account to match products with prices that will deliver value to customers and profits to suppliers.
Adapted from Marc Cosentino’s Case In Point, 8th edition (p. 42-44):
For pricing questions, the process is relatively simple: understand the company, research the product, and determine a pricing strategy.
Adapted from CIP, p. 84-85:
GE has invented a new light bulb that never burns out. It could burn for more than 500 years and it would never blink. The director of marketing calls you into her office and asks, “How would you price this?” What do you tell her?
Speaking of raising prices, here’s a summary of strategies on how companies can cover rising costs by raising prices without losing customers. The full article from professors Kusum L. Ailawadi and Paul W. Farris can be found here.
Coca-Cola is trying to boost profitability domestically by raising its prices. It’s focusing on the grocery market, where the volume is high but the margin is low. What are the economics of raising prices, and is this a good idea?
— Marc Cosentino, Case In Point, p. 82-83
K Does Cases 