Instructor’s Manual
Case: ColorPop Art & Design
Pricing
Overview
ColorPop Art & Design is a company that specializes in murals, event painting, and corporate events. In this case,
students will design pricing for two of ColorPop’s services: live event caricature and live event paintings. Students should
apply pricing strategies that they have learned in the corresponding chapter. In addition, students should justify why
they chose one strategy over another.
Resources Included
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The follow-up video from Scott Taylor of ColorPop is to be played after students have completed the Case
Report. Taylor explains his pricing in the first three minutes. Then he discusses his approach to pricing and his
beliefs on value and pricing intangibles such as art.
Important Notes
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Students can (and should) consider more than one pricing strategy. Also, many students will decide to apply
multiple pricing strategies.
A follow-up video will explain the actual pricing that the owner of ColorPop, Scott Taylor, has set for his
company. Some activities or discussion questions are best suited for use before showing students this video and
some, after. These questions and activities will be marked accordingly.
Topics Covered
Topics from Chapter
● Variable pricing
● Competitive pricing
● Prestige pricing
● Cost-based vs. Value-based pricing
● Price skimming
● Market penetration
● Dynamic pricing
● Flat-rate Pricing
● A la Carte pricing
Takeaways / Talking Points
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It isn’t always the best strategy to price the cheapest. Sometimes this can harm a brand and actually decrease
sales.
Small variations in price can raise profits.
Multiple strategies can be more effective than one.
Pricing isn’t always straightforward.
If price is too high, business can be lost. If price is too low, money is left on the table.
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The price of a product or service suggests something about its quality.
FAQ / Things Students May Ask
Q: How do I know how to price something that I know nothing about? Where do I even start?
A: This is exactly what your customers will be feeling if they have no idea what something is worth. Think about what
potential customers would do. Perhaps conduct a web search for prices. This will produce the same information that
potential customers will have on prices. You can also start with the pricing illustration that shows what the minimum
price should be (expenses) and what factors make a price higher or lower.
Q: Can I contact ColorPop or its competitors?
A: While students are free to conduct online research into the company, calling, emailing, or otherwise getting into
contact with the company is discouraged, so as to avoid interfering with the company’s ability to handle day-to-day sales
and other business responsibilities.
Discussion Questions
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Before watching the pricing resolution video (describing his prices)
○ What was most challenging about creating a pricing structure?
○ Why is pricing something like a service or art so difficult?
○ What research did you do to find a ballpark price? When researching, did you find that the prices you
found were similar to your expectations or not?
After watching the resolution video
○ Are these prices what you expected? How are they different from what you expected? Why do you think
this is?
○ Does this pricing strategy work for all services and companies? For what company might this not be a
good pricing fit?
○ How do you think the strategy explained in the video would change if a competitor entered the market?
○ Why is pricing something like a service or art so difficult?
○ What research did you do to get an idea of what the general price ballpark should be?
■ (follow up) Before you started researching, what did you think the price should be? Did you have
any idea? Was it close?
■ Takeaway: It’s hard to gauge what some services or products are worth. Customers may
research what market price is, just as you did. Also, if they’re not aware of market price, you
may need to inform them, as they may get “sticker shock.”
Value / Showing Value Discussion
○ Think about a primary target market segment and buyer persona of ColorPop. What aspects of the
service (of having a Live Event Painting or Live Event Caricature) are most important to this buyer? What
does he or she most value?
○ If you headed ColorPop, would you list prices on the ColorPop website? Why or why not?
○ What would you SAY on the website to convince the target market of the VALUE of hiring ColorPop?
○ Which teams looked at competitor prices as a factor in creating a pricing structure? (follow up) Did you
price higher or lower than the competitors? Why?
○ How does the price of item affect potential customers’ view of it?
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What type of products are you comfortable bargain shopping for? What kinds of products or services
would you NOT want to bargain shop for (quality or dependability would be more important than
price)? Which category does this product / service (that you created pricing for) fall into?
○ What clues about the company made you think that pricing higher / lower would be more effective?
What about the customer characteristics influenced higher or lower pricing?
○ Do YOU bargain shop? Are YOU the target market that he describes? If not, did you make decisions
based on YOUR preferences or the target market’s?
■ Takeaway: If you price high, your quality needs to match. People’s expectations will be high to
match your price. If your quality is outstanding, then you can build a business based on prestige
pricing. If not, you will have some unhappy customers.
Many of you may have taken into account how large the event was or the fact that the company might be selling
to a wedding (known as the “wedding tax”). This goes along with value-based pricing, or pricing according to the
value your service / product brings to the individual customer. Is it ethical to price something differently just
because it’s being used for a different purpose? Why or why not?
Activity Ideas
Sticky Note Spectrum (10–20 minutes)
Note: This activity is best used before the resolution video and followed with the questions from the discussion
subsection.
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Draw a line on the board ← → starting from $0-$5,000 (or even more).
Give each team a sticky note.
Have each team write on a sticky note its pricing for the live event pricing and its team number / name.
Have each team place its sticky note along the spectrum where they match closest.
Badge integration: Give a badge to the team who guesses closest to Scott Taylor’s actual price(s).
Discussion questions from this activity:
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Look for any clusters of pricing. What pricing strategies did the teams use to get similar prices?
Using this, call on the teams closest to the max and min and ask them about their pricing. What strategy did they
use? Did they think their pricing would be close to the min / max?
Alternatively, call on any price outliers to see what pricing strategy was chosen.
Find two prices at the opposite ends of the spectrum and ask each team to explain / defend its pricing strategy
again the other team’s.
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Popcorn (1–3 minutes)
Have one representative member from each team stand if his or her team considered each of the following pricing
factors:
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How many people would attend
How many artists would be needed
Traveling cost / cost per mile
Cost of paint and canvas
The level of experience the artist has
How large the art piece is
The companies that ColorPop had worked for previously
Online Engagement Ideas
This section shares online engagement ideas for this case.
See the Online Teaching Guide for full details on the online teaching tools referenced below.
Online Engagement Ideas for Asynchronous Classes
DISCUSSION BOARD QUESTIONS
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What was your biggest difficulty in determining the price? Why?
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(Without saying your actual price) Would you pay the price you chose for the Live Event Painting? If not, why do
you still think that price is the best strategy?
CREATE A DEBATE!
Have the class argue for or against a strategy. Debate topic: “Companies should base their pricing on what it costs them
to produce the item(s) they are selling — for instance, ColorPop.” You can let the students choose sides or divide the
class in half and assign half to the “for” side and the other to the “agains” side of the debate. Post your topic in the LMS
discussion. The students can post their best reasoning (for or against) below as well as respond to others. (The answer to
this debate question will be somewhere in the middle. Companies should take cost into account, but service-oriented
companies such as ColorPop would lose profits if they only based on the costs of paint and other materials. You can
reference the Cs pricing image to discuss.)
• Tool Integration Option: Kialo — Use Kialo to have a more structured debate throughout the week. Post your
debate topic and have students post pros or cons for either side (See the below example of a debate question
on Kialo.) You can either have students choose a side or assign students to either side. You can also allow for
voting on each pro or con that the students post, and the highest-rated argument on either side is automatically
moved to the top. ( See another Kialo debate topic below for reference.)
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Competition option: If you allow voting, you could award the highest few arguments on either side,
which could encourage well-thought-out posts.
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Note: Kialo requires that students create free accounts before posting. Students can use their Google
accounts to sign in. There is no integration for grading through the LMS.
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Online Engagement Ideas for Live/Synchronous Classes
STICKY NOTE SPECTRUM (VIRTUAL VERSION)
This one really works best by using a tool such as Google Jamboard. In Google Jamboard, either draw a spectrum of
prices or upload an image with the appropriate prices on the scale. (Note: There is a custom template available for you
to download for this case below.) Then, have the each student or team post a sticky note along the spectrum, indicating
his or her name or team name and the chosen price.
Important note: There is a follow-up video from the company in which he tells the prices of the painting and
caricatures. If you choose not to show the videos to students, you may still want to make a note of his pricing
and reasoning, as students often ask this. It works best to do this sticky note spectrum activity, then tell them
the price, and finally, have a follow-up discussion. (Below are some example questions.)
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Jamboard template:
https://jamboard.google.com/d/1W4hYqaavR_1A9UtRWnQNqENQ_3b5G3cJjs7k6DoO3F4/copy?usp=sharing
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Template preview:
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Note: Names aren’t automatically included on the sticky notes, so you’ll need to ask students to include their
names.
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Note: If you want students to be able to post as well, be sure to change share settings to “Anyone with the link
can EDIT(OR).”
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Follow-up discussion questions:
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Would you pay that price for a live-event painting? (They often say no.)
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Are you the target market? (Usually, no.)
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For those that chose a really cheap price, why? Is it because you wouldn’t pay that?
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(This can lead into a discussion about why it’s important to know the customer well and think like them
when marketing — especially when the target market is different from yourself.)
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