PRICING ANALYSIS AND MODELS

This course is elective and suggested to students in the third year of the degree in Business Administration, it is held in the second period. It provides the basic tools for the analysis of pricing models and to provide support in managerial decisions relating to price choices.
Along with the educational objectives of the degree course, in addition to theoretical aspects the course deals with methods and models in the perspective of the solution of real business problems.

The teaching activities proposed in the lectures, together with the individual study, allow the student to acquire the ability to appropriately employ models for the development and control at the managerial level of pricing policies, considering both the rational and the psychological component of price.

Expected results:

A) Knowledge and understanding
a.1) understand the main pricing strategies and tactics
a.2) know the main quantitative models for pricing policies
a.3) understand the psychological component in the consumer's reactions to price

B) Application of knowledge and understanding:
b.1) be able to calculate the optimal sale price based on the main rational models of price choice
b.2) adapt the pricing strategy to the economic context

C) Judgment skills:
c.1) to recognize the price choices implemented by various retailers and to assess their adequacy

The skills provided by the first year Mathematics course are given for acquired, in particular with regard to derivation and optimization techniques.

1. Cost oriented pricing
2. Lerner's formula and price choices in the distribution channel
3. Price and advertising: the Dorfman Steiner formula
4. Price discrimination and willingness to pay
5. Price and auctions
6. Indirect price discrimination techniques
7. Psychological pricing vs. fair price
8. Price strategies for market entry
9. Dynamic pricing and revenue management
10. Fair trade price

Principles of Pricing - An Analytical Approach
Rakesh Vohra, Lakshman Krishnamurthi, Cambridge University Press, New York, 2012
(ISBN:9781107010659)

Other teaching material will be made available on the Moodle platform of the course.

The examination is conducted as follows:

a) A compulsory written examination consisting of three open-ended exercises, based on variations of exercises previously solved in class, followed by three open-ended theoretical questions. The overall duration is less than 60 minutes.
b) A compulsory oral check: the instructor may exempt the student from the oral examination only if the written tests make it possible to assess the student’s understanding of the fundamental concepts with sufficient accuracy and provide an adequate basis for a fair and comprehensive evaluation.
c) An optional oral examination consisting of two or three questions, beginning with a discussion of the written examination.

The highest grade that may be officially recorded on the basis of examinations (a) and (b) is 26/30. If the student passes the examination with a grade of at least 18/30, the grade obtained can be recorded, provided that it does not exceed 26/30. If the written-examination grade is higher than 26/30, a grade of 26/30 may be officially recorded. The student may also choose to take the optional oral examination (c); in this case, the final grade will be the average of the written- and oral-examination grades.

Groups of students, consisting of three or four students each, may also explore a course topic in greater depth by analysing a business case. The resulting work must be presented to the other students enrolled in the course on a date to be agreed upon, which must in any event be prior to the written examination.

This activity may add up to 2 points out of 30 to the final grade.

written and oral

The instructor is responsible for ensuring the authenticity and originality of all examinations and coursework. In cases of suspected academic misconduct, an additional on-site assessment may be required during the exams, which may differ from the standard format.

To achieve a passing grade in each exercise (3 points out of 5), the student must demonstrate knowledge of the topic of the question, performing any calculations without serious errors.
To achieve an intermediate grade higher than passing (4 out of 5), the student must demonstrate in-depth knowledge of the topic of the question without serious errors.
To achieve the maximum grade (5 out of 5), the student must demonstrate in-depth knowledge of the topic of the question without calculation errors.

The course consists of 30 hours of lectures, the student in his individual work is required to understand and assimilate the basic concepts of the theory, comparing the course notes with the recommended texts; the theoretical contents are always accompanied by examples, exercises drawn from concrete examples of pricing and some simulations (business games) in the classroom.

Depending on the health situation, updates concerning the activities and their scheduling will be made available on the Moodle platform (moodle.unive.it) and on the personal pages of the instructors.

Further information and materials related to the course, both regarding organizational aspects and didactic aspects, will be made available starting from the beginning of the course on the University e-learning platform (www.moodle.unive.it). Students are required to register for the course on the Moodle platform.

This subject deals with topics related to the macro-area "Circular economy, innovation, work" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development