ADM 3322 Chapter Notes - Chapter 6: Price Discrimination, Freemium, Tacit Collusion
11 Mar 2019
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Document Summary
Dynamic pricing: a pricing strategy that varies prices for different customers at different times on the basis of demand conditions. Ex: two people getting plane tickets for two different prices. Companies in diverse industries such as sports, hotels, airlines, and car rental have been able to benefit greatly from using dynamic pricing. Such a strategy allows companies to increase revenues, allocate their resources more effectively, and focus on improving customer experience. The creation of a variable service requires a business model that allows for the costs of creating and delivering the service. Importance of setting effective pricing and revenue management strategy that fulfills the promise of the value proposition so that a value exchange takes place (ex;, consumer decides to buy the service) Any pricing strategy must be based on a clear understanding of a company"s pricing objectives. Once the pricing objectives are understood we can focus on pricing strategy.
