MBA Marketing & Pricing

Faculty of Commerce, Law and Management · CDU-BUS-MKT-910 · MBA · v1.0.0

The numbers behind a pricing or marketing decision: the arc (midpoint) price elasticity and what it did to revenue, the volume a price cut must win (or a rise may lose) to leave contribution unchanged, the return on a marketing investment, and the adoption path of a new product under the Bass model.

Lineage

Conquest Designer University, 2026 — authored from the brief, AACSB standards and the marketing-metrics canon; no prior institution is claimed

Final research project

What a price change must earn: elasticity, break-even volume, marketing return and adoption

Syllabus

Demand: arc elasticity, elastic and inelastic ranges, revenue effects
Pricing: contribution margin and the break-even sales change for a price move (Nagle & Müller)
Marketing accountability: incremental contribution and ROMI (Farris et al.)
Forecasting adoption: innovation and imitation coefficients, the Bass curve and its peak

Reference

Arc elasticity: [(Q2 − Q1) ÷ ((Q1 + Q2)/2)] ÷ [(P2 − P1) ÷ ((P1 + P2)/2)]
Break-even sales change: −ΔP ÷ (CM + ΔP), as fractions of the original price
ROMI: (incremental revenue × contribution margin − spend) ÷ spend
Bass model: N(t) = m·(1 − e^(−(p+q)t)) ÷ (1 + (q/p)·e^(−(p+q)t)); peak at ln(q/p) ÷ (p + q)

Units

Arc price elasticity · Break-even sales change for a price move · Return on marketing investment · Bass diffusion forecast

Role when narrated: You are a pricing and marketing strategist advising a commercial director. Lead with what the numbers recommend, show them, and name the customer behaviour the recommendation assumes.

Arc price elasticity · arc_elasticity

Example filled in — consult below

Between these two prices, how responsive was demand, and did revenue rise or fall?

Reference: Midpoint (arc) elasticity of demand; Farris et al. (2010) Marketing Metrics, price elasticity

Returns

elasticity: Arc elasticity
responsiveness: elastic (|e| > 1), unit elastic or inelastic
revenue1: P1 × Q1
revenue2: P2 × Q2

The example

{
  "price1": 100,
  "quantity1": 1000,
  "price2": 110,
  "quantity2": 880
}

Agents: POST /faculty/mba-marketing--pricing/arc_elasticity with JSON {pan, …inputs} and the x-402-payment header. Manifest.

Break-even sales change for a price move · breakeven_price_change

Try with the example

By how much must volume rise after a price cut (or may it fall after a rise) for contribution to stay the same?

Reference: Nagle & Müller, The Strategy and Tactics of Pricing: break-even sales change = −ΔP ÷ (CM + ΔP), all as fractions of the original price

Returns

breakevenVolumeChange: Required change in unit volume, as a fraction
newContributionMargin: (CM + ΔP) ÷ (1 + ΔP), as a fraction of the new price

The example

{
  "contributionMargin": 0.35,
  "priceChange": -0.1
}

Agents: POST /faculty/mba-marketing--pricing/breakeven_price_change with JSON {pan, …inputs} and the x-402-payment header. Manifest.

Return on marketing investment · romi

Try with the example

Did the campaign’s incremental contribution repay what was spent on it?

Reference: Farris et al. (2010) Marketing Metrics: ROMI = (incremental revenue × contribution margin − marketing spending) ÷ marketing spending

Returns

incrementalContribution: Revenue × margin
romi: (Contribution − spend) ÷ spend
paidBack: ROMI ≥ 0

The example

{
  "incrementalRevenue": 2000000,
  "contributionMargin": 0.4,
  "marketingSpend": 500000
}

Agents: POST /faculty/mba-marketing--pricing/romi with JSON {pan, …inputs} and the x-402-payment header. Manifest.

Bass diffusion forecast · bass_diffusion

Try with the example

How many customers will have adopted by period t, how many adopt in that period, and when do new adoptions peak?

Reference: Bass (1969) Management Science 15(5): N(t) = m(1 − e^(−(p+q)t)) / (1 + (q/p)e^(−(p+q)t)); peak t* = ln(q/p)/(p + q)

Returns

cumulativeAdopters: N(t)
adoptersInPeriod: N(t) − N(t − 1)
peakPeriod: ln(q/p) ÷ (p + q); 0 when q ≤ p

The example

{
  "marketPotential": 1000000,
  "innovation": 0.03,
  "imitation": 0.38,
  "period": 5
}

Agents: POST /faculty/mba-marketing--pricing/bass_diffusion with JSON {pan, …inputs} and the x-402-payment header. Manifest.