Marketing-Pricing Cases

If Southwest decided that they needed to increase their revenue they would have to start by raising the prices of their tickets. The need for increased revenue would need to be passed on to the consumers’. When a ticket price is higher with one airline than the other, the customer

Swing Manufacturing and Steady Manufacturing both operate in the widget industry, but with radically different cost structures. Swing is a capital-intensive, automated manufacturer, while Steady is a labor-intensive "job-shop." Monthly operating data are as follows:

The internet results in less fragmented pricing information and the ability to compare prices across multiple carriers. Airlines now offer promotions and extra services to attract buyers and therefore customers have an abundance of choice. As significant buyer power exists, industry returns can accrue to buyers through lower prices and discounts.

"Global airlines have realized that ancillary revenues can make a huge difference to profit and loss, especially during difficult times” (Upadhyay, 2013, p.1). From a business point of view ancillary revenue has become a necessity for all airlines as they all struggle to fill the profit gap created by high operating costs and intense competition, in order to achieve an increase in profitability (Kuuchi, 2013). According to Robson, competitive advantage is attained by targeting to provide a more relevant and advanced product offering for the same price as the competition within the same market (Robson, 1994). However low budget airlines have turned this around and have focused on attaining competitiveness by offering lower prices than competitors, making their pricing their superior value and unique benefit, without increasing the products value itself, but simplifying it to its basic and letting the customer change the product to its personal needs and demands (E. Porter, 1985). Budget ticket offerings have long proven to be one of the most successful strategies and business models in the airline industry for companies such as easyJet, to attain not only a rise in profitability but also to increase market share and competitive edge, as more and more budget-conscious tourists are willing to give up comfort in return for lower fares (Hyonhee, 2012).

The airline industry is one that has rapidly evolved both with regards to technology and product offerings. This paper argues that technological advancements, deregulation and competitive pricing and marketing strategies are what have driven change in regards to JetBlue. The paper goes on to explain how each of these factors affects and drives change in the other three. Deregulation occurred to increase competition; competition in turn affects innovation in marketing and pricing as well as technology, yet this process has no specific order with regards to where the change starts as innovation and competition, can then affect the way the market is regulated. The paper begins by giving a history of pricing strategies and how the deregulation that occurred in 1978 revolutionized the business and it's pricing. It then goes on to the industry analysis which discusses how travel agencies affected pricing due to the percentage that they took from sales. Yet with the advent of the Internet, brick and mortar travel agencies became basically obsolete as more and more passengers began choosing the cheaper online alternative. This new technology cut out the middleman, and also allowed airline industries to diminish their own costs by diminishing personnel, as they developed company websites from which the passengers could purchase flight tickets. The Internet also allowed airline companies to develop dynamic pricing models, where they could monitor their competitors'

The aim of this case study is to examine value pricing as exercised by American Airlines (AA) in 1992. The analysis will include discussion of decisions made by the company leadership, the impact of the strategy to simplify airfares, and recommendations for alternative approaches that could have provided better outcomes.

The pricing strategy for Crystal Light Kicks will eventually be in line with current pricing of other Crystal Light products as the Crystal Light brand is already in existence. Current Crystal Light pricing is at a suggested retail price of $2.56 oz for a 1.4 oz package ($3.54) that includes 10 on the go packets and $1.25 oz for a 3.2 oz canister which can make a 12 quart pitcher ($4.00) according to Pea Pod by Giant supermarket (Peapod.com). The initial pricing strategy for Crystal Light Kicks will take a penetration pricing strategy to introduce the product to assist in

Allround: Pricing was changed in line with the reported inflation, comparing with competitors and customer feedback from preceding periods. The price was varied in such a way that the firm absorbed minimal costs while most was passed on to the customer. The price for Allround throughout its lifecycle was higher than the main competitor (Besthelp). The main reason for this premium pricing was the high brand awareness and loyalty that made Allround the leader in the market. Mass discounts were varied based on sales report until a balance was found.

In general, single-period pricing models aim to solve certain marketing problems by selecting a price that maximises single-period profits (Monroe and Mazumdar, 1988). Even though, there are numerous diverse models in this class, the common feature about them is that they

Team C examines the channeling and pricing strategies of the Toyota Motor Corporation for the team’s product launch. The assignment explores the appropriate channel strategy for both the domestic market as well as the international market through direct exporting channels. The team justifies Toyota international market through extensive research on the chosen product. According to Toyota New Release “Toyota Motor Corporation (TMC) announces that cumulative sales in Japan of its hybrid vehicles have topped the one million mark, while more than 2.68 million units have been sold globally as of July 31, 2010” (Sales in Japan

Manufacturers create multiple product lines to sell to multiple price sensitive groups (Simchi-Levi, Kaminsky & Simchi-Levi, 2008, p. 397). Toyota and all other automotive manufacturers use product versioning to separate and capture both the high-end and low-end customers. Toyota uses product versioning in multiple ways; it is used by creating different styles of vehicles as well as different classes of those vehicles. Toyota creates multiple sizes of sedans, SUV’s and Trucks. Within sedans there is the Prius, Corolla, Camry and Avalon. In the SUV category, they produce the Rav4, Highlander, 4Runner, and Sequoia. The Tacoma and Tundra are produced within their truck category. These different vehicles come in different packages that provide different options that segment customers into their buying desires, based on price conscience or those wanting higher end finishing’s. As an example, if two customers both purchase a Camry from the same dealership, one customer may want an entry level package with just enough options to have a vehicle to drive. The other customer may want every option available on the Camry. Both customers purchased a Toyota Camry, yet the actual vehicles they received have major differences and very different prices. By having multiple options of the same vehicle, Toyota is able to capture multiple groups of customers.

The role of internal pricing within companies is to strengthen them internally and to make the profits increase. This approach works if the company can make more profits internally rather than going outside into the marketplace. For example, according to Jerry Ellig's 2001 "Internal Markets and the Theory of the Firm," companies are replacing bureaucratic internal resource allocation with internal markets by as if the company is a club membership rather than a structured environment. "Members join the firm and pay its membership fee when the value of the local public goods they receive exceeds the opportunity cost of joining. Some of the most important public goods provided by firms are variously referred to as organizational capabilities, competencies, or routines. These can often be characterized as public goods because they are ultimately based on knowledge, and hence involve a degree of nonrival consumption. A firm survives when its internal environment generates value-creating capabilities, competencies, and routines. The firm will continue to exist as long as the owners of its human and physical capital find it more profitable to transact inside this environment than outside" (Ellig, 2001). Therefore, if the company can make more profits internally rather than going outside, it can survive and it will help to enhance them in the long run.

In beginning to develop pricing strategies, Bury must understand that the current market in which he operates is currently is projected to continue booming in the years ahead. This, along with Bury's monopolistic status in the market opens up the ability for significant growth and financial success should his company's pricing and non-pricing strategies be successful enough to entice the public into purchasing.

In this study they use research to further understand what’s driving price dispersion? They investigate very distinct factors between online travel agents and airlines’ direct channels influence price dispersion. Airline markets are characterized by the existence of substantial price dispersion, to be intended as a measure of price variations in the market. Indeed, it is not unusual to see travelers on the same flight paying very different prices for the very same seats. This is due to the fact that airlines are able to distinguish among different types of customers and practice price discrimination, with the help of mechanisms such as advance selling, loyalty programs, nonrefundable tickets, etc. In addition, airline companies typically face uncertain demand with a fixed inventory consisting of very perishable products. Accordingly, they utilize revenue management systems to maximize revenues by dynamically adjusting prices for their seats based on whether the current booking is above or below expected values.The study of price dispersion in the airline industry can provide numerous important implications for firms, consumers and authorities in terms of firms’ pricing power, price discrimination, product differentiation, and reduction of search costs. For this reason, many researchers have devoted themselves to the study of price dispersion in

Q 4. Explain pricing methods and which method will be suitable in this present age ?