NAME- NANDA KISHORE

DIVISION- D

ROLL NO- 4744

Introduction

Pricing strategies applied by businesses, industries, and company owners differ based on a variety of
criteria such as the nature of the business, market circumstances, competition, and strategic goals.
Here are some frequent pricing policies implemented:

1. Cost-Based Pricing: This strategy sets pricing based on the firm's production costs, which
include materials, labour, and overhead charges. A markup is used to secure a profit margin.
Cost-based pricing is clear, however, it may not take into account external factors such as
customer demand or competitive price.

2. Market-based pricing is determining prices based on current market factors, such as rival
pricing, demand, and customer perceptions. Firms study rivals' pricing and alter their own to
remain competitive and grab market share.

3. Penetration Pricing: This technique entails establishing initial cheap pricing in order to swiftly
enter the market and build a big client base. The goal is to attract price-sensitive clients and
gain a footing in the market. Once a market share is gained, prices may be steadily raised.

4. Skimming pricing is the practice of establishing high initial rates for new products or services
in order to attract early adopters and consumers who are ready to pay a premium. As
demand in these areas declines, prices are gradually reduced to attract more price-sensitive
clients.

5. Value-Based Pricing: This approach involves pricing products or services based on the
perceived value to the client. Firms price their services based on client preferences,
requirements, and willingness to pay.

6. Bundle pricing is selling various items or services at a reduced price compared to purchasing
them separately. This method encourages customers to purchase additional things,
increasing overall sales income.

7. Psychological pricing is adjusting prices to impact customer perceptions and behavior. Setting
prices just below round figures (e.g., $9.99 rather than $10) or highlighting discounts and
savings might make pricing look more appealing to customers.
 8. Geographical pricing is the process of determining various prices for the same product or
service in different geographic locations depending on considerations such as transportation
costs, taxes, tariffs, and local market circumstances.

9. Premium pricing entails charging a premium price to market the product or service as a
luxury or high-quality option. This strategy focuses on rich clients who are ready to pay a
premium for greater quality or exclusivity.

These pricing policies are only a few instances of the tactics used by enterprises, industries, and
company owners to accomplish their price goals and optimize market profitability. The efficiency of
each strategy is determined by several elements, including the type of the product or service, target
market, and competitive landscape.

Congestion Pricing Policy: Case Study

Congestion pricing is a technique for decreasing traffic congestion that involves charging higher
charges for the usage of certain infrastructure or services during peak demand periods. The purpose
is to encourage people to change their travel hours, routes, or modes of transportation to less
crowded periods or alternatives, which will reduce congestion and improve overall traffic flow.

Singapore's Electronic Road Pricing (ERP) System

Singapore's Electronic Road Pricing (ERP) system is a well-known example of successful congestion
pricing implementation in a big urban region.

Singapore, a heavily populated city-state with limited geographical space, experienced significant
traffic congestion in the late twentieth century. To solve this issue, the Singapore government
implemented the ERP system in 1998 as part of its overall transportation plan.

Implementation: The ERP system uses electrical sensors positioned strategically along congested
roadways and expressways throughout the city. These gantries automatically identify cars equipped
with In-vehicle Units (IU), which are electronic devices fitted in vehicles to allow for cashless toll
payment.

Operation: During peak traffic hours, the ERP system adjusts tolls depending on real-time traffic
circumstances. Toll charges vary dynamically according to the amount of congestion, with higher
rates imposed during peak hours and reduced rates during off-peak times.

The introduction of Singapore's ERP system resulted in major benefits .

Decreased traffic Congestion: By discouraging car use during peak hours with higher tolls, the ERP
system has effectively decreased traffic congestion on Singapore's roadways and expressways.

Improved Traffic Flow: Congestion pricing has resulted in smoother traffic flow, shorter travel times,
fewer delays, and increased overall transportation efficiency.
Environmental Benefits: With fewer vehicles idling in traffic, the ERP system has helped to reduce air
pollution and greenhouse gas emissions, resulting in a cleaner and more sustainable urban
environment.

Income Generation: Congestion pricing income is reinvested in transportation infrastructure, public

transit improvements, and urban planning efforts to improve the city's mobility and livability.

CONCLUSION:
Singapore's ERP system successfully manages urban traffic congestion. By dynamically modifying toll
charges depending on real-time traffic circumstances, the ERP system fulfilled its goals of lowering
congestion, increasing traffic flow, and boosting sustainable transportation options. This case study
demonstrates the potential of congestion pricing as a helpful tool in urban transportation
management initiatives throughout the world.

Price Discrimination Pricing Policy: Case Study

Price discrimination is a pricing technique in which a company charges different rates to various
consumers or groups of customers for the same product or service, based on their willingness to pay,
demographics, purchasing habits, or other criteria. The idea is to capture consumer excess while
increasing revenue by adjusting pricing to different market niches.

Case Study: Airline Dynamic Pricing

Airlines regularly use price discrimination methods, particularly dynamic pricing, to increase revenue
and fill seats on flights.

Airlines might benefit from dynamic pricing techniques due to their variable demand and capacity
limitations. With different consumer categories having differing price sensitivity and willingness to
pay, airlines may dynamically modify ticket pricing to maximize revenue while filling flights to
capacity.

Airlines use advanced revenue management systems and algorithms to implement dynamic pricing.
These systems use past booking data, current demand patterns, rival pricing, and other variables to
establish the best pricing strategy for each flight.

Operation- Dynamic pricing enables airlines to segment clients depending on booking time, route
popularity, travel class, and demographics. Prices are updated in real time to reflect shifting demand
and supply dynamics, with higher rates being charged closer to departure or during busy travel
seasons.

Impact: In the aviation sector, dynamic pricing has several

ramifications.
Airlines can optimize income by altering pricing based on demand changes and client groups,
capturing various travelers' willingness to pay. This allows them to extract more value from clients
ready to pay a premium for convenience, flexibility, or last-minute travel.

Optimized Capacity Utilization: Dynamic pricing assists airlines in filling vacant tickets and optimizing
capacity utilization, reducing revenue losses from unsold inventory. Airlines can increase load factors
and revenue per seat by offering reduced flights to price-sensitive consumers while charging
premium pricing to those who are ready to pay more.

Consumer Segmentation: Dynamic pricing enables airlines to segment their consumer base and
customize price tactics to certain market categories. Airlines may adapt to various client tastes while
increasing income from each segment by offering a choice of price classes, additional services, and
pricing alternatives.

Competitive edge: Airlines that successfully adopt dynamic pricing obtain a competitive edge by
responding quickly to market dynamics, maximizing revenue management, and surpassing
competitors in terms of pricing plan efficacy and profitability.

CONCLUSION:
In sectors with shifting demand and capacity restrictions, airlines' dynamic pricing displays efficient
price discrimination tactics to optimize revenue and profitability. Airlines may use complex pricing
algorithms and real-time data analysis to customize rates to different consumer categories and
market situations, resulting in revenue optimization and a competitive edge in the extremely
dynamic aviation business.