ajaz_eco_204_2012_2013_chapter_16_Market_Power

There was an early assumption among many early e

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Unformatted text preview: market would bear. Airlines long ago developed sophisticated software programs to predict demand and set prices, resulting in as many different price points per flight as passengers. But now, thanks to the Internet, the state of the art is changing prices on the fly in response to real-time customer data being captured. Still, strategic pricing is a relatively untested concept outside the airline, financial and retail industries. I n a survey of its members by the Professional Pricing Society, 30 percent of respondents said they priced new products by mirroring their nearest competitors, and another 22 percent set new-product prices to recover costs and tack on a profit. Only 18 perc ent said they did customer research to determine the value of the product or service to potential customers. And when it comes to Internet pricing, 40 percent said they simply mimic the pricing of their offline sales channels, and 28 percent responded that they don't have an Internet strategy at all. W hy so many laggards? Part of the reason is that the dot-coms, initially not under much pressure to make a profi...
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This document was uploaded on 01/19/2014.

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