New Program Profile
 Getting Pricing Right the First Time

Changing prices is "like brain surgery," says Wharton Professor Z. John Zhang. "It will have either a huge positive impact or a huge negative impact, and that's why so few people responsible for pricing ever actually change prices."

And that can lead to lost profits.

"If you under- or over-price, your competition will never let you forget it," said Zhang. "Today you can't afford to learn from your pricing mistakes."

Zhang and Professor Jagmohan Raju will lead a new open-enrollment program in December 2003, Pricing Strategies: Measuring, Capturing, and Retaining Value, that will teach techniques for analyzing and setting prices to capture value. Zhang has conducted extensive research into retail pricing strategies.

"Different customers are willing to pay different amounts for the same product," Zhang said. "By zeroing in on these differences, you can extract the maximum value from your pricing structure."

Pricing in the cell phone industry is an example of targeting different customer segments. "When you have a pricing structure like cell phones, it's easier to avoid head-on competition," he said. "It's complicated for a reason."

Understanding how much customers are willing to pay for your product or service is one of the areas Zhang and Raju will address. They will use case studies from the financial services, pharmaceuticals and consumer products sectors, as well as concentrate on mini case studies that participants bring from their own current work.

Other topics that will be analyzed in the class are managing price competition, dynamic pricing, roll-up costs, psychological considerations in pricing, product line pricing, and pricing strategies for products with short lifecycles.

Pricing Strategies: Measuring, Capturing, and Retaining Value
If you have any questions about this program or would like to receive a copy of the schedule when it is ready for distribution, please send an e-mail Dara Chamides, Program Director, at chamided@wharton.upenn.edu, and we will be happy to share it with you as soon as it is available.

   

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