Marketing-Pricing Cases

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Pricing
Course Module in Marketing Management
Course Modules help instructors select and sequence material for use as part of a course. Each module represents the thinking of subject matter experts about the best materials to assign and how to organize them to facilitate learning. Each module recommends four to six items. Whenever possible at least one alternative item for each main recommendation is included, as well as suggested supplemental readings that may provide a broader conceptual context. Cases form the core of many modules but we also include readings from Harvard Business Review, background notes, and other course materials. I. Overview of suggested content (HBS cases unless otherwise noted) Title 1. Module Overview
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With its rich market data, students are also asked to make break-even analyses, estimates of customer acquisition cost, and estimates of customer lifetime value. XM, too, is considering a novel pricing structure, passing on advertising revenues and relying solely on subscription fees. As with the Virgin case, price level presumes pricing structure, and pricing structure follows targeting and segmentation, all informed with market research data. However, the XM case includes other complications, for it will need to establish partnerships with leading electronics manufacturers to provide radio receivers, and thus must consider trading off part of the subscription income to subsidize the manufacturers and lower the entry price for potential customers. There is also a discussion of some dynamic pricing possibilities. Dynamic pricing is the focus of Section 5. American Airlines, Inc.: Revenue Management, an HBS classic, gives a simple but rigorous introduction to dynamic pricing and revenue management, as it was practiced by the airline industry in 1990, subsequent to the deregulation of 1978. Revenue management is composed of pricing and yield management, and students learn through quantitative assignments that the two must be done in tandem to maximize revenue. The alternative case, Priceline.com: Name Your Own Price, extends airline revenue management into the online era. Priceline builds an
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