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Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing, and variable pricing, is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. It usually entails raising prices during periods of peak demand and lowering prices during ...
More from McKinsey on dynamic pricing: Businesses should "establish and enforce strict pricing guardrails. Your prices shouldn’t fluctuate so dramatically that they confuse and alienate ...
In particular, the authors find five patterns: skimming (20% frequency), penetration (20% frequency), and three variants of market-pricing patterns (60% frequency), where new products are launched at market prices. Skimming pricing launches the new product 16% above the market price and subsequently lowers the price relative to the market price.
Yield management (YM) [4] has become part of mainstream business theory and practice over the last fifteen to twenty years. Whether an emerging discipline or a new management science (it has been called both), yield management is a set of yield maximization strategies and tactics to improve the profitability of certain businesses.
But in the era of AI, surge pricing — or “dynamic pricing,” for those in the business — is becoming a more common tool to help companies pad their margins and, in theory, give a discount ...
By 2025, the fast food restaurant chain will begin testing dynamic pricing, which is a time-based pricing strategy that companies use to increase or decrease prices for their services or items ...
Congestion pricing in the form of variable tolls by time-of-the-day have also been implemented in bridges and tunnels providing access to the central business districts of several major cities. In most cases there was a toll already in existence. Dynamic pricing is relatively rare compared to variable pricing.
European Union lawmakers are backing calls for new rules around the use of “dynamic pricing” when selling online goods, after Oasis fans complained about massively inflated ticket prices for a ...