Setting Prices and Implementing Revenue Management精选.pptVIP

Online Test No. 1 closes this Thursday 4th August at noon If you have any questions about the answers in your test, please let me know. Online Test No. 2 is now open. Your business letter and literature summary is due very soon, Thursday 18th August Flex and Rocky students only submit via Moodle Students at city campuses submit as per your lecturer’s instructions Remember research, research, research for Assessment 2 Setting Prices and  Implementing  Revenue Management Progress to date Harder to calculate financial costs of creating a service process or performance than a manufactured good Variability of inputs and outputs: How can firms define a “unit of service” and establish basis for pricing? Cost of: haircut trim, cut, colour? Importance of time factor – same service may have more value to customers when delivered faster Amazon delivers books very quickly Customers find service pricing difficult to understand, risky, and sometimes even unethical What Makes Service Pricing Strategy Different and Difficult? Revenue and Profit Objectives Seek profit – after all, this is why you are in business! Cover costs – essential as first step Patronage and User-Based Objectives Build demand - use loyalty cards Demand maximization – off season hotel discounts Full capacity utilization – all appointment times booked Build a user base Stimulate trial and adoption of new service – free first consultation Build market share/large user base – develop economies of scale Objectives for Pricing of Services The Pricing Tripod Three Main Approaches to Pricing Net Value = Perceived Benefits to Customer (Gross Value) minus All Perceived Outlays (Money, Time, Mental/Physical Effort) – difficult to quantify! Consumer surplus: difference between price paid and amount customer would have been willing to pay in absence of other options Competing services are then evaluated via comparison of net value Enhance gross value – benefits delivered Add benefits to core product – we come to