MARK301 Lecture Notes - Lecture 11: Value-Based Pricing, Elbulli, Market Power
13 Jul 2018
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Document Summary
Air france airlines has over 75 million passengers in 2012, at an average ticket price of 500. Charging 5 euro, or 1% more per ticket would have transformed a loss of 210 million into a pro t of 165 million euro small improvements in pricing can yield signi cant results. What is price? narrow de nition price is the amount of money charged for a product of service retail price fare application fee. 1. increase monetary bene ts for desired behaviour: rebates, allowances, cash incentives, price adjustments, e. g. paying people to be pill pals in tanzania, decrease monetary costs for desired behaviour, discount, promotional pricing, sales, e. g. bike helmet coupons in seattle. 3. increase non monetary bene ts for desired behaviour: recognition, appreciation, awards, e. g. backyard wildlife sanctuary recognition plaques, decrease non monetary costs for desired behaviour, reducing time, effort, physical, or psychological costs, e. g. packaging that doesn"t stigmatize clients.
