In the late 90’s, Coca Cola decided to experiment with their pricing and customer’s willingness to pay. They created a “smart” vending machine: this vending machine knew how badly you wanted that coke, and charged you accordingly. Well, actually, the vending machine detected the temperature and assumed you were willing to pay more when the temperature was hotter. On the flip side, you paid less when it was colder outside.
2 comments:
This is an interesting analysis of a concept that i've thought about quite a bit in the past but never had the specific categories to pin each pricing strategy to.
I think, generally, that pricing discrimination is a really good thing. Obviously you wouldn't want to be paying the same price for every single seat in an arena for a huge concert. Those in the front row, who will mostly likely have a more pleasurable experience simply on the basis of the energy that the front row will have, should have pay more for that heightened experience. Theres also something interesting about this, because the price you pay for that front row ticket may also correlate to the drive you're going to have to keep up that high energy and get "pumped" for the concert/experience you're attending.
While I do think price discrimination is a good thing, there are certain tactics that Beussman explains that I definitely think would not be a good plan for any event to be enacting in their selling procedure. I would have to agree with the media's reaction to the Coca Cola vending machine scandal, and I think it points out something important about these selling tactics: they can be compared to symbiotic relationships in nature. For instance, the Coca Cola vending machine adjusted pricing only benefits Coca Cola, it doesn't really benefit the customer except for the fact that it provides the product that the customer expected in the first place. It could be described as having a commensalistic relationship with the customer. The other forms of pricing described by Beussman, however, describe a more mutualistic relationship. The customer pays for the experience that they would like to receive on the basis of how they want to experience it, and the company benefits from the increased number of people that will be more likely to purchase that experience because of the fact that they can pay for as much or as little as they want, which provides a far more customizable experience for the customer.
Yes they should be pricing based on demand. Theater is a rough industry to make money in and if you are running a theater you should do everything in your power to make the most out of your potential audiences and some of these are actually beneficial to the audience as well. Seniors and students for example. If I had to pay full price to go see shows downtown, I wouldn't. This actually goes hand in hand with Intro to Econ course here at CMU. We covered an example where if right before they are done boarding a plane, someone comes up and says Ill buy a ticket for $50. And as long as it costs less than $50 for the added weight on the plane (which it almost certainly does) then why not let him board? If I am not going to see a show for $50 and you say because I am a student I can go for a discounted price. You make a little extra money by letting me spend less.
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