1. 1. Pricing
2. 2. Price If you were manager of a hotel. How wouldyou set your hotel rates?
3. 3. Pricing
4. 4. Pricing - Considerations, Approaches, StrategyRyanair Michael OLeary chief executive of IrelandsRyanair, wants to make air travel free, as inzero cost. by the end of the decade, he promises, more thanhalf of our passengers will fly free. http://www.bbc.co.uk/news/business-20202579tab
5. 5. Factors affecting Price Decisions
6. 6. The Dual Role of PricingPricing plays a dual role in business:As a direct determinant of profitabilityAs an implicit promotional-mix element
7. 7. Marketing Objectives Survival Current Profit Maximization Market Share leadership Product Quality Leadership Other Objectives
8. 8. Marketing Objectives: Product Quality leadership Red Sage restaurant in Washington D.C
9. 9. Marketing Objectives:Market Share leadership
10. 10. External Factors Affecting Pricing Decisions Market and Demand
11. 11. Cross-Selling and Upselling
12. 12. Consumer Perception of Price and Value
13. 13. The Hypothetical Demand Schedule
14. 14. Inelastic and Elastic Demand
15. 15. Factors Affecting Price Sensitivity1. Unique Value EffectGive them value and you will create volume Ralph Hiltz
16. 16. Factors Affecting Price Sensitivity 2. Substitute Awareness Effect
17. 17. Factors Affecting Price Sensitivity3.End-Benefit Effect
18. 18. Factors Affecting Price Sensitivity 4. Price Quality EffectFour Season Hotels
19. 19. General Pricing Approaches a. Cost based pricing b. Break-even analysis c. Value based pricing d. Competition based pricing
20. 20. Break-Even AnalysisBreak-even analysis involves developingcharts that show the relationship of costs,customer demand volumes, and profitsCosts are separated into fixed and variablein order to do break-even analysis
21. 21. Break-Even Chart
22. 22. Pricing Strategiesa. New-product pricingb. Prestige Pricingc. Market-skimming pricingd. Market-Penetration pricing
23. 23. Revenue Management The Fairmont Story http://www.ideas.com/index.php/tools-resources/videos/understanding-the-value-of-revenue-management-the-fairmont-story