BUSN 6120: Managerial Economics - In-depth Pricing Strategy Review

This presentation delves into the pricing strategies employed by businesses, particularly within the context of managerial economics. It highlights how firms determine prices, considering production costs and profit margins, and discusses various pricing models such as penetration and discount pricing. The study focuses on the European packaging industry, utilizing case studies (CaCo, OppCo, and PremCo) to understand the influence of assets, routines, and individual judgment on pricing decisions. The research methodology involves explorative interviews and data analysis using case study research and constant comparison methods. Key findings emphasize the importance of individual judgment, commercial experience, and negotiation skills in pricing, which are often overlooked in previous studies. The presentation concludes with policy implications related to price discrimination, opportunity leverage, and human capital investment, while also acknowledging limitations such as the focus on a single industry and the exclusion of negotiable prices. Desklib provides similar solved assignments and resources for students.

BUSN 6120
Managerial
Economics
Pricing Strategy

 Managerial economics helps to obtain
efficient goals
 This part of economics deals with pricing
and production strategy of a firm (Hirschey,
2016)
 Managerial economics can be applied in
both non-profit and profit sectors
 This presentation will discuss about pricing
strategy of any business organisation
Introduction

 Pricing strategy implies the method where
companies set price for their products
 For setting price on a product, a firm
considers entire costs of production
 The strategy includes a small share of
company’s profit (Nagle & Müller, 2017)
 Pricing strategies are of various types:
Penetration pricing, discount pricing etc
Pricing strategy

 Pricing strategy of a firm is referred as
policy
 Through this policy a firm decide to impose
different prices for different products
 This strategy helps a firm to obtain certain
market outcomes based on certain price
 The micro-foundation related with pricing
strategy indicates about international
human action (Nagle & Müller, 2017)
Background

 The chief focus of this presentation is to
observe that how different assets and
routines can influence pricing strategy of a
company
 For this a research work on the European
packaging industry is selected
 The entire study focuses chiefly on the role
of individual judgement, commercial
experience and human capital
Objectives

 The selection and implementation of pricing
strategy is considered as an optimization
problem
 The firm intends to select most profitable
strategy related with price based on some
external determinants
 However, this procedure incurs some costs
and follows complex activity
Related ideas

 The entire study has cindered three case
studies on European Packaging Industry
 Each case study has different design and
each of them are operated independently
 The pseudonyms of these three cases are
CaCo, OppCo, and PremCo,
 After selecting these three cases, the paper
has conducted data collection process, data
analysis, analysis and drawn conclusion and
limitation
Structure

 At first, the paper has selected cases to
analyse pricing strategy
 For this multiple case study, cases are
selected in such a manner that they could
replicate either similar production or
contrary outcomes due to predictable
reasons
 Explorative interviews have been conducted
at mangers level
Methedology

 The selected business companies are
located in three distinct location
 The data for each case was conducted
through visiting each site minimum two
days
 All case studies have followed protocol of
pre-defined case study to specify the
procedure of data collection and data
sources
 Protocol are formed in a generic way
Data collection

 For analysing each case study, the researcher
has considered theoretical concepts along with
contextual factors
 Those concepts are implemented in individual
cases and to obtain information from previous
case
 The paper has assured that data collection has
become exhaustive based on theoretical
concepts
 Other essential categories are considered as
consistent throughout the study
Other consideration

 The paper has conducted 26 semi-
structured interview for collecting data
 The entire analysis considers two forms of
research methodology: case study research
and constant comparison method
 At first, interviews are transcribed for
reading them several times
 After note down individual cases, a
comparison has been conducted for
identifying theoretical pattern
Data analysis

 Each individual was formed on the basis of
pricing strategy along with factor enabling
strategies used in question
 Through analysing each individual cases,
the empirical patterns have been
summarised
 Each cases are related with each other
 At last, data analysis has been conducted to
identify some specific practical and
theoretical contribution
Data analysis

 The specified three cases analysed in this paper
have represented some typical pricing strategy
 Prices are negotiated in terms order-specific
variation
 The outcome indicates that previous studies
have not provided sufficient importance on
individual judgement, commercial experiences
and negotiation
 Moreover, the research has found that previous
studies have not provided importance on
organisation control
Finding of researcher

 The outcome of this study implies that firms have
committed various assets configuration, activities
and routines for enabling the pricing policy
implementation
 These policies are related with price
discrimination, opportunity leverage and price
elasticity
 Some policies are provide related with human
capital investment, designing proper analysis and
maintain a perfect balance between organisation
control and capacity regarding information process
Policy implication

 The entire study is limited within single pan-
European industry
 Information related to other industries of
other countries are missing
 The study does not consider the concept of
negotiable prices
Likes and Dislikes

 The study has obtained various forms of
factors enabling for differing pricing
strategy
 Factors have importance to implement
pricing strategy based on industrial market
 These market concept includes judgmental
as well as commercial experience
 Many important relationship have been
found regarding importance of human
capital, design and set up commercial
organisation and detail information on
product costing
Conclusion

References
 Hallberg, N. L. (2017). The micro-
foundations of pricing strategy in industrial
markets: A case study in the European
packaging industry. Journal of Business
Research, 76, 179-188.
 Hirschey, M. (2016). Managerial economics.
Cengage Learning.
 Nagle, T. T., & Müller, G. (2017). The
strategy and tactics of pricing: A guide to
growing more profitably. Routledge.