Tampa Tampa is a major business center, which it could explain why the demand rate of weekdays was always higher. Realizing the demand rate was higher, we set a relatively high price during the weekdays because business travelers are not sensitive to price changes. It may due to the fact that they are not paying out from their personal budget and thus tend to get whatever that are available to them without concerning of the price. For this reason, our weekday price fluctuates significantly based on demand forecast. However, we learned to keep the price to $30-32 for the weekends due to a higher volume of leisure customers. They are more price sensitive and we assumed that they are trying to find a better alternative for their vacation. Due …show more content…
The lower demand led to a lower price we set in Tampa. Therefore, Tampa contributed the least to our profits. Orlando Orlando is known for its tourist attractions and theme parks. Surprisingly, we found out that business and leisure travelers’ amounts were almost the same for weekends. Hence, we also keep the prices high for the weekdays as it is an elastic demand market. If we increase the price, the total revenue will increase proportionally. On the other hands, we set the weekend’s price as close as to the weekday’s price in order to improve our profits. We tend to target on business travelers for these 3 cities as market research showed that they are the majority customers. By targeting business travelers, we were able to make more profits. Despite the availability of close substitute (competitor), business travelers remained as our major customers and thus boost our profits. …show more content…
By checking the percentage of different groups of travelers, we found out that business and leisure travelers are nearly equal to each other, but business travelers are always a little higher than leisure travelers in overall. Therefore, we were more aggressive with Miami in our price increases for the weekdays because most of our customers are not price sensitive. Based on a few results of ours, they also showed that increasing price will benefit us more in profits. For the weekends, the market size of leisure travelers is higher. In order to match with the inelastic demand, we adjusted our price based on the demand
The first opportunity of the organization having identified the need for a n house, fulltime float provider or Locum Tenums on call. Based upon the number of patients that were being cancelled per month on average, close to 700. The information was extracted from our data warehouse. Once the information was compared to other health care systems who were experiencing similar problems, the need was identified for a float provider/Locum Tenums (on call) to be housed at the parent facility. The float provider/ Locum Tenums will be used in several aspects that will help to continue to improve access to care. They will be available when a provider calls in so clinic will not have to be cancelled. The float provider/Locum Tenums will be able to see overflow walk in patients if he or she is not providing clinic coverage and or write prescription scheduled medication for providers who are on scheduled
Spirit makes our fares so low because they know that draws in the attention of the consumer. Once they have your attention you’re shocked at the price so you go for the deal, oblivious to the fact that you walked into their trap. Southwest’s symbol for shareholders is LUV while Spirit’s is SAVE. They are not the only companies to start to enter into these paths. Hotels, rental cars and cruises are all faced with the same choice to embrace the LUV or the thriftiness with SAVE (Elliot
of price versus service in the airline industry as a whole, as well as, the
Mason, K. J. (2001). "Marketing low-cost airline services to business travellers." Journal of Air Transport Management 7(2): 103-109.
In order to measure the impact of United's price increase, we would need the price elasticity of the demand. The main problem is that there is no agreement as to whether, generally speaking, air transportation is or is not relatively price elastic. There is ample evidence that the introduction of deeply discounted fares by the low cost carriers can be very price elastic, although, each type of traveler has its own price characteristics.
Supply and demand plays an intricate role in the amount, price, and availability of products and services. The applying supply and demand concepts simulation guides users through making decisions for Goodlife, a management company for 2 bedroom apartments in Atlantis. The simulation names the user the property manager; responsible for vacation residents, new pricing for units, and advertising. The property manager makes decisions in circumstances including the changing of supply cure, demand curve, microeconomics, macroeconomics, and the equilibrium of price and quantity. All of these decisions move the business along as conditions change around it.
Historically, Dollar General operated in a highly price sensitive market segment, with 55% of its consumer base earning an average annual gross income of less than $40,000.[2] To attract these customers, Dollar General employed an Everyday Low Price strategy similar to Wal-Mart’s. Thus, keeping costs low and driving high traffic volumes were critical to the company’s financial success. Dollar General achieved this strategy in several ways, including keeping rents and labor costs low, locating in low-income, high traffic areas that offered consumers few substitutes, and offering a wide variety of popular CPG and white label goods.
With the first of the Ps, price, it is commonly known in the airline industry that ticket prices are volatile primarily because of the fluctuating fuel prices. Fuel costs make up a large portion of Lufthansa’s overall operating expense at 23% (Lufthansa Group, 2013). Another factor to consider for determining the price of a ticket is the time of year in which the available seats are to be sold, namely during the holidays when the demand for travel is high. To take advantage of simple supply and demand effects on the market around the holidays, Lufthansa specifically caters to the higher holiday demands by advertising for holiday customers.
Pricing was based on a calendar year basis running from January to December. As we can
For example, consider a high luxury cruise liner, where well-to-do people are seeking luxury, comfort and social engagement with similar people. This proven that they are far less likely to make a purchase decision based on the price attribute by putting the attention on the quality instead. Therefore, specialty products are generally priced higher than shopping products. Obviously, the prices still have to be within a consumer’s reference price range. Price reducing is sensitive in the marketplace for specialty product due to discounting and other forms of price incentives are generally ineffective since the consumer with think that it is a signal of a reduced level of
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.
The neutral perspective on airfare comes from a report published by the Federal Aviation Administration (U.S. Department of Transportation). The report focuses on the impact that low cost, low fare airlines have on airfares. It mentions that low cost airlines force major carriers to operate more efficiently and reduce fares. As a result, Americans are benefiting. One amazing fact in the report states that the competition caused by low cost, low fare airlines saved Americans an estimated $6.3 billion in airfare last year. Also mentioned is the fact that in cities where low cost carriers exist, the average one way ticket has been reduced by $54. After reviewing the report, it is safe to say that low cost, low fare airlines are the primary reason that Americans are paying lower fares, but in cities where low cost carriers don't exist, fares are still very high and are increasing.
Mandatory resort fees of $10-$20 in the lodging facilities have become a huge inconvenience for the customers today. Hotels charges these fees to cover everything from parking, phone calls, use of pool and spa, internet and gymnasiums. Their argument is that it covers the use of all the facilities provided that need constant maintenance by the hotel staff. They believe that the customers don’t want to pay for each service they use separately as it adds to the inconvenience. Also, they can subsidize the cost of all of these services if they charge a resort fee per night for every customer.
...e enough because the company has chosen the best possible way to increase the company performance. The pricing strategy is the company’s best strategy from all because it affected the sales revenue a lot. Although fluctuating the price is quite risky for a business since the customers might order from other companies if the company doesn’t do it properly, but XXX Company manage to done it well so far. The effectiveness might also be seen by the average of sales revenue between January to August from 2011 to 2013.
For example, the chart would reflect the correlation between demand and the products price, or in the case of supply, the supplied products and its price. Moreover, supply, demand, and price, along with supply elasticity can be graphed and analyzed. This particular method of tracking and analyzing data is essential in identifying the markets status and determining the best plausible route (Skousen, 2014). By studying supply and demand, one is also able to identify whether an excess or a shortage in demand or supply is occurring, or whether an equilibrium has been attained. Consequently, it is evident that supply and demand take part in the market economy and greatly influence and impact the price value. Furthermore, to express how supply and demand impacts the price value, the price value of airline tickets will be utilized as an