FINAL PROJECT: PRICING

General instructions

It is a group activity (please report the components)

It consists of a short presentation ( ppt). The report must follow the content indicated below. The presentation will be exposed in class (10 min)

Please, upload it to the Virtual campus by only one of the group components (please try before the presentation day)Content: It must be about a new development or product variation or extension or to check and existing price but showing the current situation

INDEX

1. Product/ Service value proposal and description

a. Be consistent with the price discrimination policy ( next point)

2. Price hedges, metrics, and structure: what are the suggested hedges, metrics, and the whole structure.

a. Price discrimination: Be consistent with the possible segments you find. That segment could be justified by the WTP distribution, other survey data both from primary or secondary data. Justify the

3. Use at least two methodologies ( apart from competitors comparison that it is compulsory) and compare or combination of them

a. Price optimization (If this do not apply to your case describe the technique and do it equivalently. Ask for any doubt)

i. A short survey ( no more than 15 questions) asking about some main characteristics and for the w.t.p correctly requested ( What is the price over which you would not purchase the product?). About 30 to 100 answers are more than enough. Use Facebook, SurveyMonkey, or similar. Send it to your contacts.

ii. Depict the w.tp distribution curve and the Demand curve assessing roughly the total possible demand

1. Are there some potential segments? If so try to describe them using the information gathered in the survey

iii. Conclude with the profit optimization price for the whole market and segments

b. Linear or elasticity using some existing data not the survey, or exchange value

c. Test A/B

d. Exchange value model

e. Cost-based using the standard market margin

4. Competition: Compare the optimal price with its competitors ( or reference prices) and because of the environment, choose a penetration or skimming strategy. Therefore adjust the optimal price

5. Apply psychological factors

6. Conclude your pricing proposal