What pricing and marketing (target market, product, place, and promotion) strategies should the airlines follow?
Defend your positions on why you selected the strategies you have chosen.
The Situation: Pricing strategy has to be considered in terms of target market, product, promotion, and distribution strategies. e.g. Less competition for seats on routes allows higher prices (fares) per distance traveled to be charged for those routes. Or differences in seating preferences, aisle versus window versus middle, first versus business versus cattle, fore versus aft allows variation in pricing. And, if a plane's seats are being sold faster or lower than expected, prices are raised or lowered.
Note that question is written so that you SHOULD focus on SHOULD. SHOULD the airlines follow these pricing practices? If so, why? If not, why not?
Airline know that, among other factors, flights are chosen by flyers based on price. So, to make sure that their fares are the lowest when customers search for fares in Expedia or Travelocity; airlines load additional onboard or check-in charges such as baggage handling fees to the published fares. This practice leads into the issue of total service pricing vs making customers pay for only those services used, such as pricing based on use of agent versus internet, use of overhead, and number and weight of suitcases handled by the airlines. SHOULD the airlines follow those pricing practices? If so, why? If not, why not? In effect, should airlines publish all-inclusive fares thereby asking passengers who don't want or need the amenities to subsidize the fares of those that do OR should the airlines charge for each service that is rendered thereby causing (as described in the article) overhead bins being stuffed with luggage and service workers losing their cool?
Explain the pricing strategies that firms use.
Explain what factors are involved in the development of a pricing strategy.
Explain the relationship between costs and prices.
Explain the relationship between a firm's pricing strategy and its product, distribution, and promotion strategies.