Price-setting models for the innovative business school

This chapter suggests that digitalization creates new price-setting models (PSM) opportunities for business schools due to better and more available data and analytical tools. Future business schools with innovative business models need PSM to align student needs with their own profitability requirements like, e.g., subscriptions, pay-per-use payment models, or outcome-based performance fees using big data analytics and artificial intelligence. Pricing decisions about PSMs intend to increase the price-setting power of a business school. Price-setting power is the ability to increase tuition fees without a negative impact on enrollment, necessary to compensate for cost increases and to charge for added value. Dynamic pricing systems require a fully digitalized business school with high-quality data and sophisticated analytics to meet their expectations. The application of dynamic pricing is possible, because business schools offer their degree programs and courses in advance at a fixed start date, with a fixed price, and a fixed curriculum.