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Designing and Pricing Product Lines

(Other Class Offerings)

This one-day course is valuable to both those who are involved in the design of new products as well as product and brand managers are responsible for pricing product lines. A key consideration in product design should be the trade-off between what a customer is willing to pay for various potential features and what it costs to provide them. A basic approach to designing a product (good or service) that will maximize its profit contribution from its primary target market is presented. Next the potential challenges of providing a product line that targets multiple segments, such as the potential for unprofitable cannibalization, are discussed along with ways of optimally dealing with them through effective price and product design. the course will also reveal how profits can be increased by offering and optimally pricing bundles of products and services along with (and often instead of) the individual offerings.


  • How price should influence product design decisions
    • Viewing product features as an investment in increasing the customer's willingness to pay
    • Segmenting the market and identifying targets for different products
    • Choosing and prioritizing target markets
  • Designing an ideal product for a target segment
    • Estimating the willingness to pay for features
    • Determining the cost of adding new features
    • Prioritizing feature design
  • Designing optimal product lines
    • Using a product line to target multiple customer segments
    • Accounting for cannibalization and how to use price and product design to minimize its negative effects
    • Customer psychology and the pricing of product lines
    • Product lines and competition
  • Using bundled pricing to improve product line and product mix profitability
    • How optimal bundling can increase profits
    • Pure bundling versus mixed bundling
  • Pricing new products
    • Pricing for short run returns
    • Skimming
    • Penetration pricing
  • Developing a long run product line strategy

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