Introduction to Pricing.

Price is a major parameter that affects company revenue significantly. This is why this book starts by presenting basic pricing concepts. The strategies, such as for instance, market segmentation, discount strategy, revenue management, price skimming, are developed and illustrated. Particular attention is paid to the relationships among margin, price and selling level. Then, the impact of prices on selling volume is analyzed, and the notion of a selling curve is introduced. Related pricing methods are presented such as price testing, cost-plus method, involvement of experts, market analysis and customer surveying. Included in the last category is the conjoint measurement concerned with finding what parameters of the items are important to customers. The profile method and a simplified version, the two-factor method, are also detailed and illustrated. They provide a set of partworths (i.e., numerical values) for each tester. In other words, the opinion of each tester can be represented by a point in a space whose dimension is the number of part-worths. By applying a clustering method, specifically K-mean analysis, we obtain a limited number of clusters, each of them representing a market segment. The chapter ends with the introduction of price strategies in oligopoly markets. [ABSTRACT FROM AUTHOR]