Lecture 39 - Markdown Pricing

In this comprehensive video on Pricing: Markdown Policy for our Operations and Revenue Analytics course, we explore essential strategies for optimizing pricing through markdowns. We will begin by illustrating how Segmentation can be effectively applied to tailor markdown strategies for different customer groups. The discussion will then shift to the concept of Cannibalization, examining how markdowns on one product may impact sales of another within the same brand. We’ll also cover Markdown Optimization, providing insights on how to determine the most effective discount levels to maximize revenue while minimizing inventory costs. Additionally, we will conduct an informal analysis of Sealed-Bid Auctions, comparing first-price and second-price formats, and discuss Equilibrium Strategies for a Second-Price Auction.