Enterprice Pricing Support

Pricing is vital because it is the lever that normally controls demand. Pricing is also fundamental in optimizing your product's true worth out there in the real market-place, while revenue management is managing and controlling displacements (do not sell now, or do not sell this instead sell another, wait more). Pricing is more concerned with dilution. Without having the right segmentation and distribution and terms and conditions in place, a customer could be willing to pay more but you yourself could unintentionally be offering the same product at a lower price, basically destroying value.There are two levels at which pricing action is impacted, one at a strategic level were the pricing action generates enough demand to support the target or the budget. The second level is more local where the daily or finer aspects of maximizing revenue are achieved by small range pricing tactical. Differential pricing, or variable pricing, is used by many organisations to provide services with different prices that will appeal to different market segments and will control demand for the products. Setting optimal prices for these services involves segmenting the market, determining fixed and variable costs, knowing the prices set by competitors, and being familiar with customers preferences. Price elasticity, or change in demand in response to change in price, is a measure of how sensitive demand is to price. Some customers are very price sensitive, so changes in price have a big impact on their demand. Customer relation management (CRM) databases can be used to segment the market based on different spending patterns.

The price elasticity exhibited by say airline travellers can be summarized as:

- Business travellers are less price sensitive and more concerned with arriving at their destination in time for a business meeting or a pre-arranged sales call.
- Leisure travellers are more price sensitive and often willing to change their flight to a different time of day or day of week, or take a connecting flight, if they can travel to the same destination for a lower price.

If reduction of cost is not considered an option, revenue is generated by either creating new products or by adding value to existing products, there fore new revenue generation methods are needed every time.

Price Value

Pricing Strategies

Pricing strategies are normally confounded with other factors that generate revenue. This is the reason why the effectiveness of pricing decisions is not quite obvious. Pricing strategies in various businesses involve one or a composite of these methods. These are Cost dominance, Target dominant, Market value based, Influence based pricing dominances. It would be ideal not to follow a specific pricing strategy at the start of a business. Established organizations who follow a specific strategy should ensure the switching to other strategies be gradual and surgical.

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