In its volume as of December 7, 2018 the fvw – leading magazine for tourism & business travel – quotes Dr. Friesen on the implementation of the new data standard NDC (New Distribution Capability) in the airline industry. Its implementation opens up new possibilities in the area of dynamic pricing both for travel agents and airlines. For a successful start, however, there are still some obstacles to overcome.
Mark Friesen (Check-in, Volume 05/2018)
In volume 05/2018 of check-in, the magazine of hotel distribution of the HRS Group, Dr. Friesen explained that gastronomes are able to increase revenue by implementing price and inventory management, so called Revenue Management. In the article titled “Let’s play with the prices”, Dr. Friesen illustrated the use of Revenue Management in gastronomy not only with the goal of revenue increase but also customer satisfaction. Due to intelligent pricing, demand peaks can be allocated more efficiently throughout the day of the week or time of the day. In gastronomy, all requirements are met to successfully implement Revenue Management, in order to be able to offer the right product to the right guest at the right time and at the right price, continues Mark Friesen.
Mark Friesen et al. (Journal of Revenue Pricing Management, Vol. 17 (2), Seite 115-120)
Today, dynamic pricing in most industries is an established form of pricing. The technological changes (NDC, Big data, IoT, etc.) in the airline industry allow further steps for price differentiation culminating in either personalized or personalized dynamic pricing. Personalized dynamic pricing as we define it is not to be confused with the traditional dynamic pricing of today‘s Revenue Management practices. This paper explores the factors influencing the successful introduction of personalized dynamic pricing at the example of the German airline market: (1) technological advances in data mining and the ability to detect customer preferences, (2) the ability to accurately determine customer’s willingness-to-pay by predictive analytics, (3) the use of personal data by airlines and its acceptance by consumers as well as (4) the medium-term impact on customer loyalty and the associated risks for the sustainability of the whole airline business model.
Mark Friesen (Parking Trend International, Vol. 27, No. 4, S. 37)
In some cases, international airports generate up to 50 percent of their overall annual revenue by marketing and renting space, in other words through non-aviation business. Parking maintenance at an airport plays a large part in this. 2,000 to 3,000 euros per parking space per year is not an uncommon rate. However, a study by QUINTA Consulting shows that European airports, unlike U.S. airports, are nowhere close to maximizing the revenue potential offered by professional parking management.
The strong Swiss frank has made shopping for all kind of products in Switzerland a quite expensive enterprise. Compared to retail prices in neighbouring countries like Germany Swiss prices always tend to be higher due higher purchasing power and willingness to pay of Swiss consumers. However, a recent study of QUINTA Consulting shows that retail prices for milk chocolate are surprisingly higher in Germany than in Switzerland. Despite the unfavorable exchange rate the study indicates that four of six chocolate brands are more expensive in Germany. To make international price management a success the study suggests three pricing principles: 1. use of price discrimination and versioning for exclusive Swiss retail products to create additional customer value, 2. application of psychological means of price promotion and transparency to help customers to perceive Swiss retail prices differently, and 3. to communicate retail price changes to the Swiss consumer as fairly and early as possible.