The Strategy and Tactics of Pricing, 5th Edition

Chapter 1Strategic Pricing

Coordinating the Drivers of Profitability

The economic forces that determine profitability change whenever technology, regulation, market information, consumer preferences, or relative costs change. Consequently, companies that grow profitably in changing markets often need to break old rules and create new pricing models. For example, Netflix changed the model for renting films from the daily rate at video stores to a time-independent membership model. Ryanair radically unbundled the elements of passenger air travel—charging separately for baggage, seat selection, in-person check in, beverages—enabling it to generate greater occupancy and more revenue per plane per day than its established European competitors. ...