B2B Pricing: Negotiation, Calculation, Strategy

The course content is organized around three themes:

1) Price negotiation

• Understanding the strategy and tactics of professional buyers (Automotive guest lecture)
• Distributive negotiation techniques (includes cases Hamilton Real Estate, HBS, and Dayton Foundry)
• Integrative negotiation techniques (includes cases Moms.com, Kellogg, and Meo, Meo, WHU)
• Multi-party negotiation (includes case Windblades, WHU)

2) Price calculation

• Price-volume-costs
• Price vs. payment terms vs. inventory
• Cost-plus price calculation and activity-based costing (includes case Sippican, HBS)
• Economic value calculation (includes case Atlantic Computers, HBS)
• Price analytics

3) Price strategy

• Opportunity selection and bid management (includes case Boise Automation, Ivey)
• Getting money for service (includes case: Supply Chain Partners - Virginia Mason and Owens & Minor, HBS)
• Dealer pricing systems
• Compliance and corruption (includes case Albert Stanley, HBS)

1) In regard to factual knowledge, participants are enabled to

• apply sales jargon to discussing the status of a negotiation (such as BATNA, ZOPA, walk-away price, logrolling, good cop – bad cop, and other idioms),
• understand the specifics and terminology of pricing in various industry sectors (real estate, metals, wind energy, healthcare), and
• define pricing performance indicators.

2) In regard to conceptual knowledge, participants are enabled to

• analyze negotiation interests and positions,
• evaluate alternative price strategies in a given market context,
• interpret financial data, to analyze customer value,
• calculate price-trade-offs against other profit drivers,
• calculate activity-based costs of products and services, and
• analyze deal profitability,

3) In regard to pricing-specific procedural knowledge, participants are enabled to

• apply a structured negotiation process and blueprint,
• demonstrate financial value to the customer,
• evaluate price strategies in a commoditized market,
• create a negotiation strategy,
• deal with negotiation tactics and price objections, and
• provide constructive feedback on negotiation behavior of others.

4) In regard to general business-relevant procedural knowledge, participants are enabled to

• prepare for business meetings and internal committee sessions,
• make the best out of a limited preparation time budget,
• make concise contributions to meetings,
• constructively build and comment on contributions by other participants in the meeting,
• derive a course of action from a careful analysis of the situation and a structured evaluation of alternatives, and,
• generally, to negotiate anything.

5) In regard to metacognitive knowledge, participants are enabled to

• evaluate their own negotiation behavior and skills and
• create a skill profile for price managers.

• 35% role-play sessions between students,
• 30% case-based discussions with concluding mini-lectures,
• 28% interactive concept lectures,
• and 7% managerial guest lectures.

A video shows the style of case-based sessions: https://www.youtube.com/watch?v=IbNNsq1fC0A. This way of learning requires a great amount of energy, both from the student and from the teacher.

• 100% individual performance. No team grades. No peer evaluation.
• No sit-down, speed-writing exam under time pressure, no memorizing of PowerPoint slides, no black-out risk.

The course grade is composed as follows:

• 14%: three class preparation notes (pdf, bullet points are enough, ca. 500-750 words)
• 6%: one role-play log
• 25%: three qualitative and three quantitative online quizzes
• 55%: three individual take-home papers (pdf, essay)