THE UNIVERSITY OF CONNECTICUT

SCHOOL OF BUSINESS ADMINISTRATION

PRICING STRATEGIES
(final version dated 1/1/2014)
Course Number:
Pre-requisite:
Classroom:
In-Class Hours:
Course Ends On:
Term:
Instructor:
Office:
E-mail:

MKTG 5655
MKTG 5115
TBA (Hartford Campus)
Jan 24 (5:00pm to 9:00pm), Jan 25 (9:00am to 5:00pm)*
Jan 31 (5:00pm to 9:00pm), Feb 1 (9:00am to 5:00pm)*
Feb 14 (5:00pm to 9:00pm), Feb 15 (9:00am to 5:00pm)*
March 31, 2014
Spring 2014
Dr. Girish Punj
Professor of Marketing
BUSN 351 (Storrs Campus)
Girish.Punj@business.uconn.edu

*Feb 22 (9:00am to 5:00pm) is our snow date in case any regularly

scheduled class is canceled due to a weather event.
COURSE OBJECTIVES:
The objective of this course is to give you an in-depth exposure to the
strategy and tactics of pricing. The materials to be used in this course are
designed to provide you with a comprehensive guide to making a pricing
decision for a product or service. The course will have a Marketing focus
while drawing on theoretical principles from Economics and Psychology.
REQUIRED COURSE MATERIALS:
The course materials listed below are available for online purchase and
electronic delivery from Harvard Business School Publishing for an estimated
investment of $52 through the two web links shown below. In an effort to
reduce costs, printed versions of the course materials will not be available
for sale through the MBA Shop (UConn Coop) on the Hartford Campus.
Harvard Business Review Articles (HBR):
What is the Theory of Your Firm?
Should You Punish or Reward Current Customers?
Competing Against Free
Know What Your Customers Want Before They Do
Ditch the Discounts
Competing in the Age of Omnichannel Retailing
Pricing to Create Shared Value

Which Products Should You Stock?

Smarter Information, Smarter Consumers
Harvard Business School Case (HBS):
Chateau Margaux: Launching the Third Wine
Register and Purchase the 9 HBR Articles and the 1 HBS Case at the following
link:
https://cb.hbsp.harvard.edu/cbmp/access/23287554
Simulation: Universal Rental Car Pricing:
Register and Purchase the Simulation at the following link:
https://cb.hbsp.harvard.edu/cbmp/access/23287606
Mini Cases:
Mini cases (typically 1-3 pages in length) depicting pricing practices and
scenarios that have been reported in the business press will be used to
supplement the above course materials. The mini cases have been collated
together and posted as a single PDF file on our HuskyCT course website.
The Harvard Business Review (HBR) articles are intended to provide you with
theories, concepts and best practices that relate to pricing. The Simulation
and the Harvard Business School Case (HBS) are intended to provide you an
opportunity to apply these theories and concepts. The mini cases are
intended to provide you exposure to the pricing challenges and opportunities
faced by companies today.
HIGHLY RECOMMENDED TEXT BOOK:
The highly recommended text book listed below will dramatically add to your
learning experience in the course and potentially enable you to earn a higher
course grade. Please give serious consideration to purchasing it from your
preferred online bookstore.
Thomas T. Nagle, John E. Hogan and Joseph Zale (2010)
The Strategy and Tactics of Pricing: A Guide to Growing More
Profitably (5thedition)
Prentice-Hall (referred to as NHZ in the syllabus)
OTHER OPTIONAL TEXT BOOKS:
In addition to the highly recommended text above, there are three other

optional text books--- which considered together---will enable you to become

the pricing go-to person (i.e. the pricing guru) in your organization, thereby
enhancing your career and job prospects. Please consider purchasing them.
Reed K. Holden and Mark R. Burton (2008)
Pricing with Confidence: 10 Ways to Stop Leaving Money on the
Table (1st edition)
Wiley
Julie M. Meehan, Michael G. Simonetto, Larry Montan, Jr. and Christopher A. Goodin (2011)
Pricing and Profitability Management: A Practical Guide for Business Leaders (1st edition)
Wiley
Tim J. Smith (2012)
Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price
Structures (1st edition)
South-Western
EVALUATION:
The evaluation system is designed to encourage advance reading of all assigned material, regular
attendance in class, well prepared presentations and active participation in class discussions.
One of the assignments is team-based (4 students in each team) while others are individualbased. In-class time will be made available to work on the team-based assignment when possible.
Timely completion of all course assignments (described in the next section) is expected.
Attendance in all class sessions is required.
COURSE ASSIGNMENTS:
Pricing Simulation (individual-based): Each student will participate in a
web-based pricing simulation exercise and write a 6-8 page report. The
simulation is intended to provide a real-world learning experience on how
pricing decisions are made by a company. The written reports should be sent
to me electronically as a single Word or PDF file no later than 8:00pm on
March 10, 2014. Details on the simulation exercise are provided toward the
end of the course outline.
HBR Article Presentation (team-based): Each team (consisting of 4
students) will present a pre-assigned article from the Harvard Business
Review article set being used in the course. The class session during which a
particular HBR article is scheduled for presentation is listed in the Schedule
of Activities section of the course outline. Article Presentation assignments
will be finalized during the first in-class meeting on January 24, 2014. The
typical article presentation should be of 12-16 minutes in duration using 8-12

PowerPoint slides. Please provide me with a printed copy of your slides

immediately prior to your presentation.
Mini Case Presentation (individual-based): Each student will present
and act as a discussion leader on a pre-assigned mini case that depicts
pricing practices and scenarios that have been reported in the business
press. The mini cases available for presentation have been collated together
and posted on HuskyCT as a single PDF file. The class session during which a
particular mini case is scheduled for presentation is listed in the Schedule of
Activities section of the course outline. Mini case assignments will be
finalized during the first in-class meeting on January 24, 2014. The mini-case
presentation should use 3-4 PowerPoint Slides and be of 5-7 minutes
duration. Please provide me with a printed copy of your slides immediately
prior to your presentation.
Written Case (individual-based): Each student will write a 6-8 case page
report that analyzes HBS Case Chateau Margaux: Launching the Third Wine
The purpose of the case write-up is to enhance your ability to analyze a
pricing situation and recommend a pricing strategy. The write-up should
focus on how the theoretical concepts learned in the course may be applied
in practice. The written case report should be sent to me electronically as a
single Word or PDF file no later than 8:00pm on March 31, 2014. Details on
the written case are provided toward the end of the course outline.
Class Participation (individual-based): Due to the intensive nature of the
course, you are required to attend all classes and actively engage in all inclass activities and discussions. Opportunities for enhancing your class
participation grade will be made available to interested students.
GRADING:
The above activities shall be weighted as follows in determining your course
grade:
Individual-based work
Pricing Simulation
Mini Case Presentation
Written Case
Class Participation

25 percent
10 percent
25 percent
10 percent

Team-based work
HBR Article Presentation

30 percent

SCHEDULE OF ACTIVITIES:
Please note that the schedule below is subject to change depending upon

the pace at which we cover the course material and your interest in a
particular topic(s). Hence, it is possible that an activity scheduled for a
particular session gets re-scheduled to a later time. The mini cases listed
below have been posted as PDF files on HuskyCT. The HBR articles
mentioned below are available for purchase from the electronic link listed
earlier.
Key:
L=Lecture
HBR=HBR Article Presentation and Discussion
V=Video
MC=Mini Case Presentation and Discussion
SM=Simulation Exercise
Jan 24 (Evening Session)
Team formation and Sign-ups for HBR Article and Mini Case Presentations
Introduction to the course
L: Strategic Pricing
L: Costs
L: Financial Analysis

(NHZ Chap 1)
(NHZ Chap 9)
(NHZ Chap 10)

Jan 25 (Morning Session)

9:00am-9:30am: In-Class preparation time for HBR Article and Mini Case
Presentations
MC: Southwests influence on lowering airfares waning; JetBlue, Allegiant, Spirit have
MC: Reporters Journal: As Baggage Fees Soar, Thrifty Fliers Get Creative---Travelers Pack
L: Value Creation & Price Sensitivity

(NHZ Chap 2)

MC: New York Fashion Week: The Fashion Sweet Spot: The $400 Dress
MC: Sweater Sticker Shock --- Why Luxury Clothing Costs Even More; A Run on Mink Vests
L: Price Structure & Price Segmentation

(NHZ Chap 3)

V: American Airlines
Jan 25 (Afternoon Session)
MC: Mercedes Lifts Veil on S-Class
MC: Cadenza burnishes Kia image; Low-key sedan adds some class to a brand known for low

MC: How to save at Disney theme parks; Avoid the ticket price hikes without
wishing upon a
MC: What would make you pay $50 to see a movie? Studio experiments with
mega-ticket for...
MC: The Met Will Lower Ticket Prices
L: Competition

(NHZ Chap 11)

MC: Whole Foods Battle for the Organic Shopper; Upscale Grocer Aims to
Shed Pricey
MC: Volt Falls to Electric-Car Price War --- General Motors Lops $5000 Off Sticker
SM: Universal Rental Car: Scenario B (Intermediate Phase) opens for play
4:30pm-5:00pm: In-Class preparation time for HBR Article and Mini Case
Presentations
Jan 31 (Evening Session)
HBR: What is the Theory of Your Firm? (relates to NHZ Chap 3)
HBR: Should You Punish or Reward Current Customers? (relates to NHZ Chap
11)
MC: Why some Redskins season ticket holders are seeing a 57 percent price increase
MC: The best baseball teams for your buck; see how your club ranks by using the fan version...
MC: Bay Area: Warriors Go On Offense to Fill Seats --- Team Uses Data to Refine Ticket
Feb 1 (Morning Session)
HBR: Competing Against Free (relates to Chap 11)
L: Value Comm. & Pricing Psychology

(NHZ Chap 4)

MC: Corporate News: For Tide, a New Wave --- P&G Tests Waters Again for Bargain
MC: P&G to Cut Package Sizes for Diapers
MC: Black Friday: A Retail Illusion
MC: Sometimes, We Want Prices to Fool Us
MC: MANSION---Spread Sheet: Price High or Go Low? --- Its the home-sellers dilemma
Feb 1 (Afternoon Session)
L: Price in the Marketing Mix
& Pricing over the Product Life Cycle

(NHZ Chap 7)

MC: Corporate News; GM Tries to Curb Discounting

MC: Say Goodbye to the Car Salesman --- Armed with prices from the Web, Customers Dont
MC: Follow the Bouncing Prices
MC: J. C. Penney Returns to Coupons and Marks Up Prices
MC: How a great sale affects your brain
HBR: Know What Your Customers Want Before They Do (relates to (NHZ Chap 7)
Feb 14 (Evening Session)
HBR: Ditch the Discounts (relates to NHZ Chap 7)
HBR: Competing in the Age of Omnichannel Retailing (relates to NHZ Chap 7)
L: Pricing Policy
L: Price Level

(NHZ Chap 5)
(NHZ Chap 6)

MC: Home & Digital: Calling Upstarts: Small Cell Carriers Offer Deals
MC: Retailers Cut Apple iPhone 5C Price; Wal-Mart, T-Mobile to Offer
Discounts on
MC: Cracking the Apple Trap
Feb 15 (Morning Session)
HBR: Pricing to Create Shared Value (relates to NHZ Chap 5 & 6)
L: Pricing Strategy Implementation

(NHZ Chap 8)

MC: How Ticketmaster ruined the concert going experience, and how it might
be saved
MC: Forum Theatre will let theatergoers decide what to pay
MC: Economics, Sliced --- 99-Cent Price War Puts Pressure on Manhattan Pizzerias
MC: Dry Cleaner hopes to clean up // Chicago-based CD One Price Cleaners
HBR: Which Products Should You Stock? (relates to NHZ Chap 8)
Feb 15 (Afternoon Session)
MC: U.S. News: Life in Fast Lane, at a Cost --- States Are Adding Express Toll
Portions to
MC: On Sale: The $1,150-per-Hour Lawyer---Legal fees Keep Rising
MC: Luxury-Goods Firms Little China Secret

MC: Hamburgers Come to Africa

HBR: Smarter Information, Smarter Consumers
Discussion of the Simulation Exercise assignment
Discussion of the Written Case assignment
Course Evaluations (official UCONN and on www.ratemyprofessors.com)
V: Dont Just Set Prices, Manage Them Strategically
SM: Universal Rental Car: Scenario C (Advanced Phase) opens for play

DETAILS ON THE HBR ARTICLE PRESENTATIONS

The purpose of the HBR article presentations is to introduce important
theoretical pricing concepts and pricing practices to the class and show how
they integrate with the course material. The articles have been selected to
highlight pricing decisions and scenarios that are normally encountered by
firms. The typical HBR article presentation should draw attention to the key
ideas mentioned in the article and the examples used to reinforce them. It
should provide a basis for class discussion.
A recommended format for these presentations is given below. The typical
article presentation should be of 12-16 minutes in duration and use 8-12
PowerPoint slides. No additional research on the companies or organizations
mentioned in the article is needed. Please provide me with a printed copy of
your PowerPoint slides immediately prior to the presentation.
RECOMMENDED SLIDE TITLES & SEQUENCE:
The Pricing Situation or Issue or Problem (1 slide):
Relevant Article Facts (3-4 slides): Present a summary of key points in
the article. Communicate the general content and tone of the article to the
audience. Emphasize those facts which you believe are particularly relevant
for class discussion.
Recommendations in the Article (3-4 slides): Highlight the
recommendations made by the authors in the article. Relate them to pricing
actions that could be taken by firms.
Discussion Questions (1 slide): List 3-4 thoughtfully worded questions
that you believe provide a basis for evaluating the recommendations made
in the article Form opinions on the questions you select, but do not reveal
them till you have heard from the rest of the class.
HBR ARTICLES AVAILABLE FOR PRESENTATION
Jan 31 (Evening Session)
HBR: What is the Theory of Your Firm?
HBR: Should You Punish or Reward Current Customers?
Feb 1 (Morning Session)
HBR: Competing Against Free
Feb 1 (Afternoon Session)
HBR: Know What Your Customers Want Before They Do

Feb 14 (Evening Session)

HBR: Ditch the Discounts
HBR: Competing in the Age of Omnichannel Retailing
Feb 15 (Morning Session)
HBR: Pricing to Create Shared Value
HBR: Which Products Should You Stock?
Feb 15 (Afternoon Session)
HBR: Smarter Information, Smarter Consumers

DETAILS ON THE MINI CASE PRESENTATIONS

The purpose of the mini case presentations is to attempt to relate theoretical
pricing concepts to the pricing practices of firms or organizations. The mini
cases are based on news reports that have appeared in business and general
interest publications in the preceding 1-3 years. The typical mini case
presentation should evaluate the soundness of a particular pricing strategy
and provide a basis for discussion that enables the rest of the class to do the
same. Since our analysis is post-hoc, and with the benefit of hindsight, there
is no assurance that the company or organization used a similar analysis (or
any analysis at all). The typical mini-case presentation should use 3-4
PowerPoint Slides and be of 5-7 minutes duration.
In rare instances, it may be necessary to do a limited amount of online
research (30 minutes maximum) to update the content of the mini case or
provide additional background information. Please provide me with a printed
copy of your PowerPoint slides immediately prior to the presentation.
MINI CASES AVAILABLE FOR PRESENTATION
Jan 25 (Morning Session)
MC: Southwests influence on lowering airfares waning; JetBlue, Allegiant, Spirit have
MC: Reporters Journal: As Baggage Fees Soar, Thrifty Fliers Get Creative---Travelers Pack
MC: New York Fashion Week: The Fashion Sweet Spot: The $400 Dress
MC: Sweater Sticker Shock --- Why Luxury Clothing Costs Even More; A Run on Mink Vests
Jan 25 (Afternoon Session)
MC: Mercedes Lifts Veil on S-Class
MC: Cadenza burnishes Kia image; Low-key sedan adds some class to a brand known for low
MC: How to save at Disney theme parks; Avoid the ticket price hikes without
wishing upon a
MC: What would make you pay $50 to see a movie? Studio experiments with
mega-ticket for...
MC: The Met Will Lower Ticket Prices
MC: Whole Foods Battle for the Organic Shopper; Upscale Grocer Aims to
Shed Pricey
MC: Volt Falls to Electric-Car Price War --- General Motors Lops $5000 Off Sticker
Jan 31 (Evening Session)
MC: Why some Redskins season ticket holders are seeing a 57 percent price increase
MC: The best baseball teams for your buck; see how your club ranks by using the fan version...
MC: Bay Area: Warriors Go On Offense to Fill Seats --- Team Uses Data to Refine Ticket
Feb 1 (Morning Session)
MC: Corporate News: For Tide, a New Wave --- P&G Tests Waters Again for Bargain
MC: P&G to Cut Package Sizes for Diapers

MC: Black Friday: A Retail Illusion

MC: Sometimes, We Want Prices to Fool Us
MC: MANSION---Spread Sheet: Price High or Go Low? --- Its the home-sellers dilemma
Feb 1 (Afternoon Session)
MC: Corporate News; GM Tries to Curb Discounting
MC: Say Goodbye to the Car Salesman --- Armed with prices from the Web, Customers Dont
MC: Follow the Bouncing Prices
MC: J. C. Penney Returns to Coupons and Marks Up Prices
MC: How a great sale affects your brain
Feb 14 (Evening Session)
MC: Home & Digital: Calling Upstarts: Small Cell Carriers Offer Deals
MC: Retailers Cut Apple iPhone 5C Price; Wal-Mart, T-Mobile to Offer
Discounts on
MC: Cracking the Apple Trap
Feb 15 (Morning Session)
MC: How Ticketmaster ruined the concert going experience, and how it might
be saved
MC: Forum Theatre will let theatergoers decide what to pay
MC: Economics, Sliced --- 99-Cent Price War Puts Pressure on Manhattan Pizzerias
MC: Dry Cleaner hopes to clean up // Chicago-based CD One Price Cleaners
Feb 15 (Afternoon Session)
MC: U.S. News: Life in Fast Lane, at a Cost --- States Are Adding Express Toll
Portions to
MC: On Sale: The $1,150-per-Hour Lawyer---Legal fees Keep Rising
MC: Luxury-Goods Firms Little China Secret
MC: Hamburgers Come to Africa

DETAILS ON THE WRITTEN CASE

Purpose:
The purpose of the written case assignment is to provide you an opportunity to bring together the
concepts, theories, and applications learned in the course in formulating a pricing strategy. The
specific task at hand is to recommend a pricing strategy for Chateau Margaux with regards to the
launching of their third wine. The term pricing strategy is intended to encompass the various
pricing-related decisions discussed in the case.
Please use a third-person narrative style of writing. Organize your write-up using headings and
sub-headings (and sub-sub-headings if needed). No additional research on Chateau Margaux is
necessary or desirable. Base your analysis solely on the information mentioned in the case. Use
evidence-based arguments that apply the concepts and theories learnt in the course to the data
and the facts mentioned in the case.
The written reports should be sent to me electronically as a single Word or PDF file no later than
8:00pm on March 31, 2014. You are free to use your own format in writing the case report. A
suggested length would be 6-8 pages.
Overall Question:
To recommend a pricing strategy for Chateau Margaux with regards to the launching of their
third wine.
Six Specific Questions to be Answered in the Written Report:

DETAILS ON THE SIMULATION EXERCISE

The purpose of the simulation is to apply pricing concepts to a real-world
scenario that involves making multi-period pricing decisions. The concepts
explored in the simulation are: nature and dynamics of consumer response to price (i.e.,
price elasticities); importance of understanding differences across customer segments;
importance of understanding differences across geographic markets (heterogeneity of demand);
importance of accounting for competitive response; impact of price on overall marketplace
demand; impact of general economic conditions on the demand function; economics of pricing
decisions; and the role of pricing in managing product inventory (e.g., managing excess demand
and stock-outs).
The web-based (asynchronous) simulation presents a context in which you develop a pricing
strategy for improving performance of a rental car operation in Florida. The simulation involves
three regions--Orlando, Tampa, and Miami--which vary in size, market dynamics, and customer
mix. The focus is competition between two car rental companies. The simulation lasts up to 12
simulated months. You set weekday and weekend rental prices for each region for each period (a
simulated month) and make fleet capacity decisions at several points throughout the simulation.
The written reports should be sent to me electronically as a single Word or
PDF file no later than 8:00pm on March 10, 2014. You are free to use your
own format in writing the simulation report. A suggested length would be 6-8
pages.
Six Specific Questions to be Answered in the Written Report:
Describe the pricing strategy you used during Scenario C of the Simulation Exercise.
What was your highest cumulative profit level attained during Scenario C?
How would you characterize the behavior of each type of customers (business/leisure)
responses to changes in price?
What differences did you identify between the three markets -- Orlando, Miami, and Tampa?
What differences did you notice between weekdays vs. weekend demand?
What did you think the competition was doing?

COURSE POLICIES
Professional Integrity:
Students in this course are expected to abide by the highest standards of ethics and personal
integrity, and to adhere to all university policies regarding academic honesty. Academic
misconduct is not acceptable and may result in a failing grade for the course and/or other
sanctions based on applicable university policies. A student who knowingly assists another
student in committing an act of academic misconduct shall be equally accountable for the
violation.
Issues of academic misconduct are covered in The Student Code, Part IV: Student Conduct
Policies and in Appendix A. (see http://www.dos.uconn.edu/student_code.html).
Special Needs:
If you are a student who needs academic accommodations due to a disability, please be in contact
at your earliest convenience so that appropriate accommodations can be made.