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Shifting the Paradigm from ‘Value-based’ to…

Shifting the Paradigm from ‘Value-based’ to…

Shifting the Paradigm from ‘Value-based’ to ‘Behavioral Pricing’

‘Value-based Pricing’ has been widely accepted as the best approach to pricing. Nevertheless, all classical pricing tools within this approach still build on the assumption that customers behave like the famous ‘homo oeconomicus’ – perfectly informed, selfish and rational decision makers with stable preferences. These assumptions are each contradicted by an overwhelming amount of insights from ‘Behavioral Economics’ and ‘Neuroscience’. Although this simplification facilitates mathematical modelling and arithmetical price optimisation, it totally ignores margins that arise from the predictably irrational decision strategies which can be found in every sector, be it B2C or B2B. In the end, this inhibits us from defining smarter pricing strategies which are able to leverage the frugal heuristics and systematic biases of the decisions “real” customers are making.

Building on a validated and award-winning framework as well as on many case studies from different industries ranging from B2C to B2B, the seminar will systematically convey insights that go beyond the classical assumptions and tools of pricing research and strategy. It will characterize Behavioral Pricing as a general approach to pricing that goes well beyond the classic value-based pricing paradigm. In the course of the seminar, we will show how you can develop more profitable pricing strategies by applying these insights to define price level, price structure, price dynamics as well as price communication.

Level 400

(Tuesday, October 24th)

Attendees will learn:

  • Recent research insights on human decision making that are helpful no matter in what sector you are working

  • A conceptual framework to comprehensively leverage Behavioral Economics in the pricing strategy

  • The benefits and limits of pricing tools like PSM or Conjoint Analysis and how to modify and complement these methods to avoid risks and pitfalls

Florian Bauer, PhD

Founder and Member of the Executive Board, Vocatus AG

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