Increase Profits With Utility Pricing
In 1999 Coca Cola experimented with vending machines that altered their prices based on local temperature. Utility is the relative satisfaction or derived value a customer receives from a purchase. Coke's logic was that the utility of a cold Coca Cola on a hot summer day is higher than usual. Customer reaction was decidedly negative. The media had a field day with such nasty headlines as: - "A cynical ploy to exploit the thirst of faithful customers" (San Francisco Chronicle) - "Lunk-headed idea", (Honolulu Star-Bulletin) - "Soda jerks" (Miami Herald) So, can you apply revenue management principles (i. ...
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