Pricing is one of the most powerful ways to improve – or destroy – profits. This course can help you improve the pricing practices at your company or allow you to help your clients make better pricing decisions.

Price is a function of the value provided to customers. This course focuses on customer perceptions of value and their willingness to pay for that value.

I'll start by explaining the concepts and calculation of value-based pricing. Understanding what customers value and whether they are willing to pay for that value should drive your company's strategies and costs.

Who determines value? The customer makes the ultimate decision when they decide what price they are willing to pay for a product and which product to buy (if any). Behavioral finance offers insights into how customers determine value. I'll explain how.

I'll walk through price differentiation and segmentation concepts and examples. You'll then learn about the price-response function and how to estimate it. Estimating the price-response function helps a company better project sales volumes at a new price, which is important for deciding whether to change prices.

I'll finish this course by touching on pricing ethics. Customers must perceive pricing to be fair for them to be willing to buy a product from a company.

This course is one of three video-based pricing courses. The other two courses are:

  • Pricing Profitability Analysis and Processes: I explain how to analyze pricing decisions to anticipate their profit implications. Cost-plus pricing is a popular pricing methodology, but I explain its weaknesses. I also cover how many parts of a company can work together to improve pricing.
  • Pricing Profitably in the Face of Competition: The focus of this course is how other companies can impact prices. I show how to analyze the profitability at stake by responding to competitor pricing. You'll learn common pricing strategies relative to market pricing. Finally, I'll show how to identify and reduce poor discounting practices.

These courses focus on financial management and profitability analysis of pricing. A Deloitte pricing effectiveness benchmark study found that: "Companies that actively pursue pricing as an important part of their strategy typically outperform industry peers on several financial metrics… Companies that are pricing leaders are 26 percent better at managing true profitability."

NOTE: These three courses are also available in a combined Text Based format:
Pricing for Profitability

Course Key Concepts: Pricing, Profitability Analysis, Management Accounting, Value-Based Pricing, Price Differentiation, Economic Value, Price-Response Function.

Learning Objectives
  • Recognize and recall key concepts of value-based pricing.
  • Recognize methods of price differentiation or segmentation.
  • Identify pricing practices that may be unethical.
Last updated/reviewed: February 20, 2024
Course Complexity: Foundational
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Welcome and Overview6:14
  Value-Based Pricing18:08
  Communicating Value to Customers and Staff6:48
  REVIEW QUESTIONS: Communicating Value to Customers and Staffquiz
  Price Differentiation Concepts16:26
  Estimating the Price-Response Function18:26
  REVIEW QUESTIONS: Price Differentiation and Price Structure Examplesquiz
  Pricing Ethics9:18
  Key Takeaways7:02
  REVIEW QUESTIONS: Key Takeawaysquiz
  Pricing Profitability for Your Product's Value1:44:26
  Slides: Pricing Profitably for Your Product’s ValuePDF
  Pricing Profitably for Your Product’s Value GlossaryPDF