Page 214 - DMGT510_SERVICES_MARKETING

Unit 11: Pricing of Services

b. Half Notes

c. Average
d. Marginal
13. For which of the following services, pricing above the competition would work?
a. Axis Bank
b. Indigo Airlines

c. Leela Kempinski
d. Idea
14. In a movie theatre, the morning shows tickets are priced less than those of evening shows.
This is price discrimination.
a. Group of user
b. Time of use
c. Point of use

d. Place of use
11.5 Pricing Strategies

11.5.1 New Service Pricing Strategy

In developing a price strategy for a new service, two key issues need to be addressed:
What price position is sought for the service?

How novel is the service offering?


Task Compare the prices at Café Coffee Day with those at local coffee shops. Prepare
a report to illustrate your findings and analysis.

11.5.2 Price Skimming Strategy

Saturation Pricing Strategy

The success of a saturation pricing strategy is dependent upon a sound understanding of the
buying behaviour of the target market, in particular:
The level of knowledge, which consumers have about prices.

The extent to which the service supplier can increase prices on the basis of perceived added

value of the service offering.
The extent to which the service supplier can turn a casually gained relationship into a

long-term committed relationship.

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