...1) Executive Summary This research paper will investigate the benefits of dynamic and fixed pricing and how the different pricing methods are perceived by consumers in the online market. It will examine consumer perceptions and behavior when purchasing various goods and services in an online environment. As well as the trends of increasing dynamic pricing methods on various websites even for goods and services sold at posted prices. 2) Introduction The pricing issue we have chosen to investigate is that of dynamic vs. fixed pricing of products and services on the internet. Prior to the introduction of e-commerce, products and services were distributed through brick-and-mortar stores with fixed prices. However, many online websites are now offering variable pricing methods for the exact same products. Consumers are now able to have much more control over the prices of these online goods and services. With a typical brick-and-mortar store or online store, the price is set by suppliers to meet the average consumers’ willingness to pay, in order to maximize profit. One of the main advantages associated with a set retail price is reliability. Consumers can make a decision to purchase the product at the current price, and they have a sense of security that the product will be available at the set price. With the introduction of e-commerce suppliers are now able to sell their products to much larger markets across the world and are no longer restricted by geographical...
Words: 2085 - Pages: 9
...1. For each type of retailor-supplier partnerships (quick response, continuous replenishment, VMI), discuss situations where that type would be preferred over the other two. Give real-world example of each partnership. Quick Response Strategy Here the purchase order is decided upon and prepared by the Customer As the name suggests, it is primarily aimed at reducing the order response time along with achieving greater accuracy in shipping the correct goods to the correct location in correct quantities. The above is achieved by using computerized equipment such as bar code readers, RFIDs etc. This also speeds up the overall operating expenses, discount situations, out of stock situations etc. Continuous Replenishment Here the inventory and everything related to the inventory is managed by the Vendor. The decisions are based on the levels which are decided on, on a prior basis. Here either the vendor continuously monitors a customer’s inventory, or a customer provides the vendor with all the current updated inventory data, to help him make timely shipments and maintain the customer’s inventory at agreed upon levels. Vendor-managed Inventory Here the inventory is managed and the purchase order is prepared solely by the Vendor without any external involvement of the customer. Here either the supplier monitors the customer’s inventory with his own employees or receives information from the customer about his stock levels. The vendor automatically refills the stock, without...
Words: 2240 - Pages: 9
..................................................................6 6. Examples of price discrimination......................................................................................7-16 7. Price discrimination in universities..............................................................................17 - 23 8. Summary.............................................................................................................................24 What is price discrimination? The goal of every business is to maximize its profits and they can achieve this goal by successfully determining the price of their products. There are many different ways to deal with determining the price of the products. All of these ways are called – pricing strategies. Price discrimination is one of many ways how companies may determine the price of their product. Different marketing specialists define price discrimination a bit differently. For example, professor of marketing and business administration Dainora Grundey says that price discrimination is “charging a different price for the same good/service in different markets”. The authors of the marketing coursebook “Marketing strategy” O.C.Ferrell and Michael D. Hartline say: “Price...
Words: 5466 - Pages: 22
...Experiencer are motivated by self expression. Young, enthusiastic, and impulsive consumers. I am sometimes motivated with self expression. I often spend money on new products and experiences. It is the new experience which matters than having the same daily routines. Example.Travel fairs are a major attraction to me and in order to use my energy i am regularly visiting the gym Achievers are consumers who have goal oriented lifestyles and a deep commitment to career and family. Their social lives are basically structured around their social values. They don't respond to changes well as they are conservative and lives conventional lives.I do like to have durable products. As an example in order to achieve my goal i have structured my whole study career. Section 2 Dell company uses a lot of social media to engage with its customers online and market their product. Dell uses its community page from where consumers can access to a range of blogs reflecting its business segments. It is also very active on twitter and mainly use twitter to keep their customers informed, sell, engage and support their customers. Dell is also using Facebook for advertisement of their products.It also has presence in other social sites like YouTube, Flick, Linkedln and Scribd. They also advertise through mass media channels such as television. Dell have come up with their media campaign...
Words: 915 - Pages: 4
...Unclassified Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development DAF/COMP(2014)14 06-Jun-2014 ___________________________________________________________________________________________ English - Or. English DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS COMPETITION COMMITTEE DAF/COMP(2014)14 Unclassified AIRLINE COMPETITION -- Background Paper by the Secretariat -18-19 June 2014 This document was prepared by the OECD Secretariat to serve as a background note for Item IX at the 121st meeting of OECD Competition Committee on 18-19 June 2014. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. More documents related to this discussion can be found at http://www.oecd.org/daf/competition/airlinecompetition.htm. English - Or. English JT03358883 Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. DAF/COMP(2014)14 TABLE OF CONTENTS Introduction ................................................................................................................................................. 3 1. Features of the airline industry .............................
Words: 29874 - Pages: 120
...10 1 Introduction Pricing Els Gijsbrechts and Katia Campo Objectives This chapter does not have as its aim the provision of ready-made methods for the assessment of price levels. Its objectives are: 1 to indicate the importance and complexity of price decisions for marketing managers; 2 to consider what is a ‘price’; 3 to identify the factors internal to the firm that influence price decisions; 4 to identify the factors external to the firm that influence price decisions; 5 to discuss pricing strategies and tactics. C onsider a Belgian couple contemplating a shopping trip to London during the Christmas period. The cheapest way to cross the Channel would be to take a ticket on the ferry from Oostende to Ramsgate, which would amount to about Bfr. 1,500 per person. While they can afford this from a budgetary viewpoint, taking the boat would mean spending about five hours travelling, which would mean losing almost half of the ‘available’ weekend to hunt for interesting bargains in the London shopping area. Taking the plane would drastically reduce travelling time, but the air fare of Bfr. 4,900 per person is not overly appealing. Friends recommend that they buy a combined ticket from the Belgian Railways and the Channel (regular price: Bfr. 3,465 per person). This seems to be the most interesting option, but unfortunately no more regular tickets are available for the morning of the Christmas weekend. The price of a first classRailway/Channel ticket (Bfr. 6,960 per person,...
Words: 21291 - Pages: 86
...Atletico de Madrid Case Analysis On May 2000, Club Atletico de Madrid were relegated to Second Division for the first time in its history. It was a game which reflected the season for ATM. The last minute penalty miss by the player who had not missed one whole season showed what destiny had in store for the club. It was for ATM a totally, new and not so good experience. It triggered the crises that was to follow. In hindsight, this should’ve never happened and before the season began fans expected and hoped that 99-2000 season will rather be one of the best. There was a good 54 million budget. It was a season that was ought to be good but, as the “hard luck club” were facing some serious wrath now. Fans who have never seen the team go down to second division had a low morale. The financial implications of going down to Second Division loomed large on the ATM. The communication and marketing department concerns had deepened. Just as the result were unexpected as compared to the beginning of the season so was ATM marketing department was getting ready for what they had never experienced. In Spanish football, ATM was third largest club in almost all the respect. What differentiated ATM from their biggest local rivals Real Madrid, who were hugely successful was the fan base. Not in terms of numbers but in the way they connected to the club and their spirit. Nobody really knew what relegation will bring to the club. Diagnosis There were many implications of the relegation of...
Words: 1194 - Pages: 5
...SUMMER 2007 V O L . 4 8 N O. 4 Arvind Sahay How to Reap Higher Profits With Dynamic Pricing Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published. REPRINT NUMBER 48415 pricing How to Reap Higher Profits With Dynamic Pricing S un Microsystems Inc. chairman Scott McNealy forecast that “With recent advances in wireless and information technology, even our cars could … call for bids whenever the fuel tank runs low, displaying a list of results from nearby gas stations right on the dashboard.”1 It sounds far-fetched. But dynamic pricing — where prices respond to supply and demand pressures in real time or near-real time — is making inroads in many different sectors, including apparel, automobiles, consumer electronics, personal services (such as haircuts), telecommunications and second-hand goods. The advent of the Internet led to cost transparency, decreased search costs and ease of price comparison. Some observers concluded that as a result, prices would decrease and equalize across different channels, and that fixed prices would continue to be the norm.2 However, price dispersion continues to be widespread and dynamic pricing is entering new sectors. EBay Inc. used auctions to sell more than $20 billion worth of goods in 2005. Ford Motor Co. sold more than $50 billion worth of automobiles in North America with demand-based DP in 2003...
Words: 6384 - Pages: 26
...SMR254 Arvind Sahay How to Reap Higher Profits With Dynamic Pricing Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the This document article appears as originally published.is authorized for use only by Neelu Bhullar at MANAGEMENT DEVELOPMENT INSTITUTE until REPRINT July 2013. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860. NUMBER 48415 pricing How to Reap Higher Profits With DynamicPricing un Microsystems Inc. chairman Scott McNealy forecast that “With recent advances in wireless and information technology, even our cars could … call for bids whenever the fuel tank runs low, displaying a list of results from nearby gas stations right on the dashboard.”1 It sounds far-fetched. But dynamic pricing — where prices respond to supply and demand pressures in real time or near-real time — is making inroads in many different sectors, including apparel, automobiles, consumer electronics, personal services (such as haircuts), telecommunications and second-hand goods. The advent of the Internet led to cost transparency, decreased search costs and ease of price comparison. Some observers concluded that as a result, prices would decrease and equalize across different channels, and that fixed prices would continue to be the norm.2 However, price dispersion continues to be widespread and dynamic pricing is entering new sectors. EBay Inc. used auctions to sell...
Words: 6717 - Pages: 27
...Term paper in Service Management Revenue Management: does it work for event providers? Contents 1 Introduction 1 2 Theory 1 2.1 Definition 1 2.1.1 Literature Review 2 2.1.2 Working Definition of Revenue Management 3 2.2 Criteria for Applications 3 2.3 Implementation of Revenue Management 5 2.3.1 Objectives for Establishing Prices 5 2.3.2 Pricing Strategy 5 2.4 Methods of Revenue Management 6 2.4.1 Price Discrimination 6 2.4.2 Capacity Control 8 2.4.3 Overbooking 9 2.4.4 Dynamic Pricing 9 3 Case „Theater Hagen“ 10 3.1 Review of the criteria for application 10 3.2 Description of used methods 11 4 Conclusion 13 5 Reference 14 List of figures 1.1 Interdependence between criteria....................................................................4 1.2 Criteria for market segmentation.....................................................................7 1.3 Theatre hall plan...............................................................................................11 1.4 Pricing table......................................................................................................12 Introduction Revenue Management is pioneered by American airlines and is in practice since the “Airline-Deregulation-Act” from 1978. Since this act the airlines are free to set their prices the way they want to. Most of the airlines used this new opportunity to take advantage of their customer’s different levels of price...
Words: 4157 - Pages: 17
...version, July 27, 2003 Abstract. The rapid erosion of privacy poses numerous puzzles. Why is it occurring, and why do people care about it? This paper proposes an explanation for many of these puzzles in terms of the increasing importance of price discrimination. Privacy appears to be declining largely in order to facilitate differential pricing, which offers greater social and economic gains than auctions or shopping agents. The thesis of this paper is that what really motivates commercial organizations (even though they often do not realize it clearly themselves) is the growing incentive to price discriminate, coupled with the increasing ability to price discriminate. It is the same incentive that has led to the airline yield management system, with a complex and constantly changing array of prices. It is also the same incentive that led railroads to invent a variety of price and quality differentiation schemes in the 19th century. Privacy intrusions serve to provide the information that allows sellers to determine buyers’ willingness to pay. They also allow monitoring of usage, to ensure that arbitrage is not used to bypass discriminatory pricing. Economically, price discrimination is usually regarded as desirable, since it often increases the efficiency of the economy. That is why it is frequently promoted by governments, either through explicit mandates or through indirect means. On the other hand, price discrimination often arouses strong opposition from the public. There is no...
Words: 11710 - Pages: 47
...A. Samuelson and Eugene F. Fama in the 1960s, this idea has been applied extensively to theoretical models and empirical studies of financial securities prices, generating considerable controversy as well as fundamental insights into the price-discovery process. The most enduring critique comes from psychologists and behavioural economists who argue that the EMH is based on counterfactual assumptions regarding human behaviour, that is, rationality. Recent advances in evolutionary psychology and the cognitive neurosciences may be able to reconcile the EMH with behavioural anomalies. There is an old joke, widely told among economists, about an economist strolling down the street with a companion. They come upon a $100 bill lying on the ground, and as the companion reaches down to pick it up, the economist says, ‘Don’t bother – if it were a genuine $100 bill, someone would have already picked it up’. This humorous example of economic logic gone awry is a fairly accurate rendition of the efficient markets hypothesis (EMH), one of the most hotly contested propositions in all the social sciences. It is disarmingly simple to state, has far-reaching consequences for academic theories and business practice, and yet is surprisingly resilient to empirical proof or refutation. Even after several decades of research and literally thousands of published studies, economists have not yet reached a consensus about whether markets – particularly financial markets – are, in fact, efficient...
Words: 11295 - Pages: 46
...e-Business W@tch to monitor the growing maturity of electronic business across different sectors of the economy in the enlarged European Union, EEA and Accession countries. Since January 2002, the e-Business W@tch has analysed e-business developments and impacts in manufacturing, construction, financial and service sectors. All results are available on the internet and can be accessed or ordered via the Europa server or directly at the e-Business W@tch website (http://ec.europa.eu/comm/enterprise/ict/policy/watch/index.htm, www.ebusiness-watch.org). This document is a sector study by e-Business W@tch, focusing on the tourism industry. Its objective is to describe how companies in this industry use ICT for conducting business, to assess the impact of this development for firms and for the industry as a whole, and to indicate possible implications for policy. Analysis is based on literature, interviews, case studies and a survey among decision-makers in European enterprises from the tourism industry about the ICT use of their company. Disclaimer Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The views expressed in this report are those of the authors and do not necessarily reflect those of the European Commission. Nothing in this report implies or expresses a warranty of any kind. Results from this report should only be used as guidelines as part of an overall strategy...
Words: 80447 - Pages: 322
...FEU MBA 209 Case Study Jetblue Airways: A Cadre of New Managers Takes Control Case Background JetBlue is a low-cost domestic airline in the United States following a rather interesting combination of ‘low-cost and differentiation’ as its strategy. From its inception in 1998, the airline grew to become the 11th largest player in the airline industry in a short span of 6 years. It had been the only other airline apart from Southwest airlines, to have been profitable during the aftermath of the September 11, 2001 attacks on World Trade Center, and at a time when the entire airline industry was experiencing losses. In 2001, JetBlue planned to launch an IPO to fund its expansion plans. The IPO had to be postponed in light of the terrorist attacks, but JetBlue continued with its expansion plans using its share of the $15 billion bailout ($5 billion in direct compensation and another $10 billion in loan guarantees) the US government granted to the aviation industry, and a fresh infusion of funds from its original investors. Jet Blue is facing the same problem as nearly any company in any industry; that of competition. The most important task at hand for the company of Jet Blue is to maintain the quality of their product so as to ensure that they are able to garner customers, their product being superior to that of their competition. Thus far, Jet Blue has done this quite well, establishing a name for themselves as a low-cost provider of an exemplary air-travel experience...
Words: 1159 - Pages: 5
...PEST Analysis: The Indian Airline Industry A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector: Political Factors In India, one can never over-look the political factors which influence each and every industry existing in the country. Like it or not, the political interference has to be present everywhere. Given below are a few of the political factors with respect to the airline industry: o The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country. o Overall India’s recent political environment has been largely unstable due to international events & continued tension with Pakistan. o The recent Gujarat riots & the government’s inability to control the situation have also led to an increase in the instability of the political arena. o The most significant political event however has been September 11. The events occurring on September had special...
Words: 10702 - Pages: 43
