Price discrimination Essay Example

however, comes with the disadvantage of potentially risking losses in order to make a profit. Shareholders may be hesitant to take on such a risky move and could potentially dispute with directors. Due to the risks involved, many businesses have stopped using this pricing strategy. In conclusion, I recommend implementing a going rate pricing strategy as the most optimal pricing approach.

BA has struggled with significant losses while attempting to eliminate competitor companies. Implementing going rate pricing enables market comparisons and prevents price wars. Additionally, BA's strong brand identity appeals to many consumers, potentially favoring them over other low-cost airlines. However, adopting destroyer pricing could lead to a negative outcome and ultimately force BA out of the market. In contrast, Easyjet has employed and experienced both effective and disadvantageous pricing strategies in recent years.

Easyjet has employed contribution pricing as one of its pricing strategies. This approach is advantageous because it allows for different prices to be charged for various destinations, which is understandable to customers, who are familiar with the concept of 'more miles, more money'. Moreover, it enables the business to have a clear comprehension of the service being provided. Nonetheless, contribution pricing may result in certain popular destinations becoming less popular because of the higher prices. Competitors might use this to their benefit by charging lower costs for destinations that Easyjet charges higher prices for. This can be an appealing way for alternative airlines to gain respect.

Easyjet has implemented a successful market-oriented strategy known as price discrimination. This approach offers several advantages, such as enticing consumers to book early to secure lower prices while discouraging those who book last minute and have to

pay more for the same service. Additionally, by implementing this strategy, Easyjet can track early bookings to determine popular flights and how many seats are filled. This approach also minimizes last-minute holiday bookings.

Easyjet benefits from price discrimination by charging higher prices during peak seasons, when many people want to travel to popular destinations such as Paris in June or the Alps in December. This strategy ensures customer demand and travel certainty, while caution must be taken not to set prices too high and discourage bookings. Easyjet has also adopted going rate pricing, enabling easy comparisons and a broad range of choices. Unlike many businesses that lower prices competitively at their own peril, Easyjet adjusts its prices according to its competitors to avoid price wars, using costplus pricing to maintain profitability through markups.

Easyjet is a top player in the market, thanks to their wide range of popular services, including the ITV series 'Airline' and various forms of advertising. They hold the power to set prices which competitors will strive to follow. As airline travel continues to grow in popularity in the UK, with numbers rising from 4 million in 1958 to 224 million in 2006, many other companies are implementing successful customer relationship strategies.

To keep both shareholders and customers satisfied, it is important to implement effective pricing strategies. Easyjet's pricing strategies have been successful, positioning the airline as a low cost carrier. The most successful strategy, in my opinion, is Easyjet's price discrimination approach. In 2005, the airline charged premium prices for flights to destinations in Greece and Barcelona during Champions League games, resulting in an estimated profit of ?3 million.

It's been about 10 years since

customers have noticed that Easyjet increases prices during peak times and holidays, which has become a common practice of price discrimination. As a result of their effective pricing strategies, I think Easyjet will continue to see good profits in the upcoming years.