THE UNIVERSITY OF CONNECTICUT

SCHOOL OF BUSINESS

MBA PROGRAM

PRICING AND REVENUE MANAGEMENT

(preliminary version dated 10/21/2015; subject to changes until 5/1/2016)

Course Number: MKTG 5655

Classroom: TBA (Stamford Campus)
Class Hours: May 10 (Tue) to May 14 (Sat) 9:00am to 4:30pm
Term: May Term 2016
Instructor: Dr. Girish Punj
Professor of Marketing
Office: BUSN 351 (Storrs Campus)
E-mail: Girish.Punj@business.uconn.edu

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 $45 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 Stamford Campus.

Harvard Business Review Articles (HBR):

Should You Punish or Reward Current Customers?

Competing Against Free
Competing in the Age of Omnichannel Retailing
Ditch the Discounts
Pricing to Create Shared Value
Which Products Should You Stock?
Know What Your Customers Want Before They Do
Smarter Information, Smarter Consumers

Register and Purchase the HBR Articles at the following link:

Simulation: Universal Rental Car Pricing:

Register and Purchase the Simulation at the following link:

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 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 concepts and best
practices that relate to pricing. The Simulation is intended to provide you an opportunity to make
profitable pricing decisions in a competitive environment. The mini cases are intended to provide
you exposure to the pricing challenges and opportunities faced by companies today.

OPTIONAL TEXTS:

Listed below are four optional text books that would dramatically add to your learning
experience in the course while enabling you to become a pricing “guru” and the pricing go-to
person in your organization. Please consider purchasing them 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 (5th edition)
Prentice-Hall (referred to as NHZ in the syllabus)

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.

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 June 2,
2016. Details on the simulation exercise are provided toward the end of the course outline.

HBR Article Presentation: Each student 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 May 10, 2016. The typical article presentation should be of 12-16 minutes in duration using
6-8 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
May 10, 2016. The typical mini-case presentation should use 3-4 PowerPoint Slides and be of 6-
8 minutes duration. Please provide me with a printed copy of your slides immediately prior to
your presentation.

Class Participation (individual-based): Due to the intensive nature of the course, you are
required to attend all classes and actively engage in all in-class activities and discussions.
Opportunities for enhancing your class participation grade will be made available to interested
students (please consult with me during the lunch break on May 10, 2016 to take advantage of
this opportunity).

GRADING:

The above activities shall be weighted as follows in determining your course grade:

Pricing Simulation 40 percent

Mini Case Presentation 20 percent
HBR Article Presentation 30 percent

Class Participation 10 percent

Enhanced Class Participation 10 percent (extra credit)
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 and the
Simulation are available for purchase from the two electronic links listed earlier.

Key:
L=Lecture
HBR=HBR Article Presentation and Discussion
V=Video
MC=Mini Case Presentation and Discussion
SM=Simulation Exercise

May 10 (Morning Session)

9:00am - 9:30am: Course Introduction and Sign-ups for HBR Article and Mini Case
Presentations

L: Strategic Pricing (NHZ Chap 1)

L: Costs (NHZ Chap 9)

May 10 (Afternoon Session)

L: Financial Analysis (NHZ Chap 10)

V: Don’t Just Set Prices, Manage Them Strategically

SM: Universal Rental Car: Scenario B (Intermediate Phase) opens for play

3:30pm - 4:30pm: In-Class preparation time for Mini Case and HBR Article Presentations

May 11 (Morning Session)

9:00am - 9:30am: In-Class preparation time for Mini Case and HBR Article Presentations

L: Value Creation & Price Sensitivity (NHZ Chap 2)

L: Price Structure & Price Segmentation (NHZ Chap 3)

MC: Southwest’s influence on lowering airfares waning; JetBlue, Allegiant, Spirit have…
MC: Reporter’s 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
May 11 (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...

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…

May 12 (Morning Session)

9:00am - 9:30am: In-Class preparation time for Mini Case and HBR Article Presentations

MC: Why some Redskins season ticket holders are seeing a 57 percent price increase
MC: Bay Area: Warriors Go On Offense to Fill Seats --- Team Uses Data to Refine Ticket…

HBR: Should You Punish or Reward Current Customers?

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

HBR: Competing Against Free

May 12 (Afternoon Session)

L: Pricing in the Marketing Mix

& Pricing over the Product Life Cycle (NHZ Chap 7)

HBR: Competing in the Age of Omnichannel Retailing

MC: Corporate News; GM Tries to Curb Discounting

MC: Say Goodbye to the Car Salesman --- Armed with prices from the Web, Customers Don’t…

MC: Follow the Bouncing Prices

MC: J. C. Penney Returns to Coupons and Marks Up Prices

HBR: Ditch the Discounts

May 13 (Morning Session)

9:00am - 9:30am: In-Class preparation time for Mini Case and HBR Article Presentations

L: Pricing Policy (NHZ Chap 5)

L: Price Level (NHZ Chap 6)

MC: How a great sale affects your brain

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

HBR: Pricing to Create Shared Value

May 13 (Afternoon Session)

L: Pricing Strategy Implementation (NHZ Chap 8)

HBR: Which Products Should You Stock?

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: Shopper Alert: Price May Drop For You Alone

MC: Online Retailers Vary Prices Based on a User’s Location

May 14 (Morning Session)

9:00am - 9:30am: In-Class preparation time for Mini Case Presentations

HBR: Know What Your Customers Want Before They Do

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

May 14 (Afternoon Session)

Discussion of the Simulation Exercise assignment

Course Evaluations (official UCONN and on www.ratemyprofessors.com)

SM: Universal Rental Car: Scenario C (Advanced Phase) opens for play

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 B. (see http://www.dos.uconn.edu/student_code.html).
 DETAILS ON THE HBR ARTICLE PRESENTATIONS

The purpose of the HBR article presentations is to introduce important pricing concepts and
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 6-8 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 (1-2 slides):

Relevant Article Facts (4-5 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.

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

 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 6-8 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

 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 June 2, 2016. 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 customer’s (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?