This is a guest post written by Professor Rick Cardot, Director of Center for Pricing at the Simon Graduate School at the University of Rochester. The Simon School, known for its economics-based empirical and analytical research, has taken a unique approach to pricing by providing an unparalleled depth of pricing courses to its students.
Value based pricing is at the core of our pricing curriculum and we approach pricing from this perspective. Doing analysis and understanding the economics of value, then using that understanding to effectively price. Once we’ve addressed the role of value and economics in pricing we can expand the discussion to aspects such as costs, competition, elasticity and segmentation as well as other factors like the psychology of pricing.
“Understanding how products create value for customers is key to improving pricing performance, especially in B2B settings. This is why we teach economic value analysis as one of the first topics in our pricing curriculum.”
– Jeanine Miklos-Thal, Assistant Professor of Economics and Marketing
While the discussion can be very intuitive and students enthusiastically buy into the concept, the implementation can be more challenging. We give our students the latest in modern price theory, flexible frameworks and strategies, but how did that translate into executing job responsibilities in the professional world?
This implementation and execution of economic value-based pricing was one of the areas of opportunity in our pricing curriculum. The other obvious area of opportunity was to familiarize students with enterprise pricing information systems. Exposing our students to industry leading tools, and providing them with experience using those tools gives them an appropriate professional and managerial appreciation for their value in solving many pricing related issues.
LeveragePoint was a very natural partner. The idea of value based pricing is a central part of our pricing track and the fact that the LeveragePoint software supports enterprise implementation of economic value analysis and pricing fits our program perfectly.
The partnership with LeveragePoint has made our pricing graduates more marketable and more importantly better equipped to have a real impact in the organizations they work for. We’ve evolved the curriculum to keep it current and program graduates now have experience to industry used pricing tools and valuable insight related to implementing economic value based pricing. Its really a win win win. A win for the student, a win for their future employers and a win for our partners like LeveragePoint.