Training: Advanced Quantitative Methods in Discount Management

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Advanced Quantitative Methods in Discount Management

Abstract

Immediately after the moment that prices have been set, executives are faced with the challenge of discounting.  Discount decisions can chew up more resources and cause more organizational strife than any other pricing decision.  While some executives would like to eliminate all discounts, discounting is a form of price segmentation and can actually improve profitability when properly managed.  Yet, left to its own accord, discounts will spread like a virus infecting every transaction and wreak havoc on profits.

In this seminar, we will look at the three commonly used tools for analyzing firm specific discounting practices, and the four commonly used tools executives have to restrain them.  We will also use economic models to show the value of discounting and the influences of Prospect Theory and Nash Equilibrium on discounting policy.

Attendees Will Learn

  • How discounting can simultaneously lower market entrance prices, increase volumes, and improve profitability
  • Quantitative methods for measuring and monitoring discounting policy (In Session Excel Extended Exercise)
  • Quantitative and managerial tools for restraining discounts
  • Implications of Prospect Theory and the Nash Equilibrium on discounting policy

Audience

This seminar is appropriate for pricing executives and analysts.  It instructs attendees how to analyze pricing data and interpret the results of a transactional pricing analysis

Agenda

Item

Time (7 hrs)

Profit Sensitivity to Discounts

1:00

Value of Price Segmentation

1:00

Economic Efficiency of Price Segmentation (Mathematical Derivation)

1:00

Excel Exploration of Price Segmentation Value

1:00

Managerial Tools for Discount Management

1:00

Excel Exploration of Discount Monitoring Tools

1:00

Implications of the Prisoner’s Dilemma and Nash Equilibrium on Discount Management

1:00

One-Sheet Overview of Price Training Courses