Supply and Demand Easyjet

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Assignment 2.5 Supply, Demand and Easyjet

The Marketing Mix is the name given to the elements which are the key components which a marketing plan should be based upon. Typically in Marketing literature there are four elements: price, place, promotion and product, however this is now sometimes expanded to incorporate another 3 elements: people, physical evidence and process. Pricing policy is clearly very important to the marketing mix and is affected by variables such as firm’s objectives, the nature of competition, demand and firm costs. Firms operate pricing in different ways according to their marketing strategy and the industry in which they participate; an example of pricing methods will be shown and evaluated further in the
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This indicates that Easyjet flight pricing is based upon demand (and supply but supply is fixed) for the flights, as the further in advance you book, the cheaper it is and on the flipside if you discover you have to go to Madrid tomorrow the price is much higher as your need/demand is more urgent and thus you will pay a higher price. However the obvious exception here is that it is nearly £60 cheaper to fly out tomorrow than it is to fly out in a week’s time. I would suggest that this appears to be an anomaly, as the obvious pattern of decreasing prices with advance bookings coupled with the knowledge that Easyjet formulates it’s prices based on supply and demand for each particular day and thus rewarding advance bookings (lower demand for far away dates) with cheaper prices suggests that this is an unusual occurrence. One reason for the flights in a week being higher than a flight tomorrow to Madrid may be because the flight in a week is the weekend before Valentine’s Day so may be booked up more than we would typically expect from a normal day a week in advance. This peak and higher price for a potentially popular weekend represents that Easyjet is employing an almost near perfect pricing scheme in an economic sense e.g. each consumer is being charged a slightly different price relative to the level of demand for the flights (there is a fixed supply due to the fixed number
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