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An Overview of Pricing Analysis

(Other Class Offerings)

This one or two day course is designed to provide an overview of the analysis that should be done to formulate an effective pricing policy. This course is designed for product managers and those who need to make pricing decisions but lack extensive formal pricing training or analytical experience. A summary of basic techniques to analyze these factors is presented along with applications to case examples. When possible these cases will be drawn from examples of pricing issues facing the client company. Specific topics covered and depth of coverage will be determined by class needs and objectives.


  • Overview of pricing
    • The traditional economics-based approach to pricing
  • Understanding costs
    • Assessing which costs are relevant to the pricing decisions
    • Developing cost functions: determining how costs vary with the level of activity
    • Breakeven analysis and cost driven pricing
    • Iso-profit analysis
  • Segmenting the market
  • Approaches to estimating the willingness to pay of an individual or market segment
    • Monetary value approaches
    • Trade-off (conjoint analysis) approaches
    • Statistical estimation based on purchase history
  • Psychological factors influencing demand
    • The role of reference prices in the customer's evaluation of price
    • Perceived relationships between price and quality
    • Heuristics and biases
  • An overview of modeling choice and demand
    • Discrete choice models and their limitations
    • Forecasting market demand
  • Pricing in a competitive environment
    • How game theory can be applied to competitive markets
    • Predicting competitive actions and reactions
    • When to be an price leader, when to follow, and how to be effective in the role chosen
    • Price wars: when to avoid them and how to win them (or minimize the damage from them)
  • Pricing tactics (Topics covered depend on class needs and objectives)
    • Effectively charging different prices to different customers
    • Pricing according to time of use (peak load pricing)
    • Temporary price reductions
    • Quantity discounts
    • Bundling

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