Future Rotman students are in for some real awesomeness!!

One of the directors of the full-time MBA program, Kevin Frey, opened up time slots over the next few weeks to meet with us students to address any concerns we have about the program, hear from us how we can make the program even better, etc.

I really like Rotman and want it to maximize its awesomeness even when I am gone so I decided to attend one of Kevin’s sessions. SO fantastic!!  While I feel like I have gotten a lot out of Rotman, I am jealous of the class of 2014, 2015, 2016, etc. You guys are going to be SO set. Here are some cool things I learned:

--Recruitment--

The recruitment process will have changed COMPLETELY going forward. Rotman will be placing much more importance on employability upon graduation. This means in part, an emphasis on admitting candidates with sufficiently strong verbal and written communication skills and these skills will be explicitly evaluated in the application process. I am SO happy to hear this as this helps in so many ways:

-Group work becomes less stressful as ALL members of the team can pull their weight equally

-Class discussions become more enriching with more students able to clearly express their viewpoints

-The pool of viable candidates to employers becomes larger which increases the prestige of Rotman students on the whole

The interview process is also becoming much more rigorous. This means applicants can expect to be pushed a bit in their interviews. Also, each Rotman recruiter is assigned to and is responsible for specific applicants. So if, for example, X is interviewed by Y and upon admission, X turns out to be an all-star, Y will be recognized for their good job spotting an excellent candidate. Conversely, if X is a real dud, Y will be held directly accountable for admitting a dud. As a result, you can be sure awesomeness per capita at Rotman will increase.

Something that I didn’t realize until I spoke with Kevin was the importance of increasing the class size from about 280 (what it is now) to 400+. It turns out the big and most prestigious US schools have AT LEAST 400 students in the class (i.e. MIT). Many have about 1000 (i.e. Kellogg). Back when I first heard that the class size was increasing, I was worried about the talent pool diluting. But apparently MBA applicants don’t think that way. What tends to happen with a small class size is that they think “the class is so small I won’t apply because I won’t get in.” In reality, by admitting more students, you give more confidence to the all-star people of the world that if they apply they can actually get in and therefore more all-stars end up applying to (and getting in) the school. Increasing class size is also important from a recruitment standpoint which was the other big thing touched on by Kevin....

Insight into the fun world of product and service pricing

Hello friends!

So this semester I am taking my electives at Rotman, one of which being Pricing. I took this class because I figured if I am going to be a brand manager or work with brand managers, understanding how to price the brands which I am involved with is probably pretty important.

Also, from when I worked at Dell, when we made any new marketing initiative, the price of the products we were advertising was almost always the biggest issue.  Pricing was in fact such an important consideration that several members of the marketing team’s job was almost entirely pricing products! I had a basic understanding of what they did but now wanted to really get it, so I could be a more complete marketer upon finishing my MBA so here I was.

I know MBA school often gets knocked for making students study cases of really random industries unrelated to that which you will ultimately work in but the cases are actually pretty useful for practice, in this case, practice pricing products and services. Especially because there are so many ways to do it. 

It’s a lot of math to even figure out how much your products COST never mind what you will price them at! Things that one normally takes for granted, like the electricity in your building (overhead), is actually built into the costs of stuff you buy. This actually helps explain why Walmart can offer such low prices- they cut corners on almost EVERYTHING in their company (note that I said “almost”; they spend a lot on technology and such which helps give them their competitive advantage but I digress). So for example, by having offices that look like they belong in 1960 means their costs are lower and therefore can ultimately price lower.

This also explains in part why when I was working at Dell, we were always undercut by Acer. Acer had SUPER lean Canadian operations compared to Dell- like 5 people working in its Canadian marketing department while Dell Canada had like 25. So of course now, each Dell computer had to recover the costs of more salaries than Acer thus the price difference (all else being equal). This would be cost-based pricing and is I think, why my pricer colleagues were using most of the time.

Besides cost-based pricing there are some other pricing varieties as well. One thing that I thought was pretty cool was a study my prof (Dilip Soman) did on how different pricing plans influence product use. i.e. for a gym membership, to encourage usage, it is better to offer monthly pricing plans than annual ones. This is because when you pay each month, it is a reminder that you are still paying for the gym and therefore should probably use it. But if you pay annually, a month after paying your membership fee, life gets in the way of going to the gym and you forget about it. (I am probably the exception to this rule- annual or monthly membership…I am going to work out!) Consumer psychology with pricing! Fascinating.

Besides psychological or cost-based pricing like what I talked about above, another way is “value based” where you basically just pay for what you actually want (i.e. what you value). This is why cellphone plans exist, for example- by having different pricing options for different types of people, Rogers, for example, maximizes profit because they can meet the needs of every type of customer. People will be more likely to buy if they know they are paying only for stuff they actually want.

Thanks to our delightful pricing class, once I get back to work in a few months, I will be ready to make some awesome prices for whatever I am marketing to help my team make some big $$!