Universal Car Rental V2 - Pricing In the pricing simulation, students will manage a car rental agency operating in the Orlando and Miami Florida market. The learning objectives of the simulation are to enable students to employ the knowledge gained in the course to managerial decision-making that takes in to account the impact of consumer sensitivity to price, the heterogeneity of demand (customer, market and temporal), inventory management, competitive response, and general economic conditions on an organization’s profitability and performance. The simulation involves two rental companies – Universal and its primary competitor, with each student making decisions for Universal. The simulation lasts 12 months with each student making pricing decisions each month. Students will set weekday and weekend prices for each month and each market. Grades will be determined by the overall performance (profitability) of Universal during the simulation and a paper that analyzes the decision-making processes they utilized during the simulation.

Overall Strategic Considerations:

1. What pricing strategy did you used as you played the game? Did you change strategies or maintain the same strategy throughout? If you changed strategy, what caused you to do so?
2. What was the goal of your pricing strategy (what were you trying to do - maximize profits, maximize market share, etc. and why)?

Market Demand: customer price response function:

1. What differences did you notice between weekday vs. weekend demand and what do you think the weekend/weekday demand are a proxy for?
2. How would you characterize the behavior of each type of customer’s (business/leisure) responses to changes in price?
3. How did you use the observations you made regarding differences in these segments’ responses to price changes in your pricing strategy?
4. Did you try to target a particular customer group? How were you able to target a specific group of customers through pricing?

Capacity Management:

1. What did you do with capacity utilization?
2. Was it harder to manage capacity surplus or capacity shortfall, and was one more important than the other?

Competitive Price Moves:

1. What did you think the competition was doing with respect to its pricing strategy?
2. Do you think your competitor was intelligent it its responses to your pricing decisions?

Impact of General Market Conditions:

1. Describe what if any patterns you observed in overall demand across the 12 months that you played.
2. Explain if you think it was a good or a bad year to be managing this business?
3. Do you think your pricing strategy would change over a longer period of time? What factors would you consider in the long-run? Explain why or why not your strategy might change.