Service firms often face the problem of maximizing revenue and capacity, and one way to do this is through dynamic pricing. But what exactly is dynamic pricing? Have you had the experience of chatting with your neighbor on a plane and discovering that the two of you paid very different prices for the same air ticket in the same class of seats? That's dynamic pricing at work. Dynamic pricing is a pricing strategy that varies prices for different customers at different times on the basis of demand conditions. It is commonly used in the airline industry but has also gained popularity in other industries. For example, the Eagles, the highest- selling American band in US history, started a system of increasing the prices of the best scats and lowering the prices of cheaper seats for a show organized in carly 2010 in Sacramento, California. Their highest-priced tickets cost 5250, but the cheapest ticket was priced as low as$32. They cooperated with Live Nation Entertainment Inc. to use dynamic pricing for their tickets. Ten categories of ticket prices were set based on anticipated demand. In this way, the band hoped to fill more scats and at the same time make the tickets more affordable for fans Lion King's success in turning its once-shaky fortunes around and becoming one of Broadway's top grossing shows has been largely attributed to dynamic pricing. Similarly, the San Francisco Giants, a professional baseball team sold 25,000extra tickets during the fi rest year in which they experimented with dynamic pricing. It camed them an extra $500,000 in revenue. Officials from the Major League Baschall and the National Basketball Association expect dynamic pricing to become the norm for the sporting industry. Companies like Score Big Inc. are hoping to tap into this trend. It has been estimated that about 25-35% of seats for sports events and 40 50% of concert tickets remain unsold every year Score Big Inc, aims to become the Priceline.com in this space by using demand-based dynamic pricing to help find buyers for these tickets. Companies in diverse industries such as sports, hotels, airlines, and car rental have been able to benefit greatly from using dynamic pricing. Such a strategy allows companies to increase revenues, allocate their resources more effectively, and focus on improving customer experience. Thus, dynamic pricing is certainly here to stay! On the basis of the above case study answer the following questions (Que 1 and 2) Quel. When there is a complaint about pricing, it's typically the feeling around the price to value, not the dynamic pricing Elaborate this statement with the help of above case. (8 marks) Service firms often face the problem of maximizing revenue and capacity, and one way to do this is through dynamic pricing. But what exactly is dynamic pricing? Have you had the experience of chatting with your neighbor on a plane and discovering that the two of you paid very different prices for the same air ticket in the same class of seats? That's dynamic pricing at work. Dynamic pricing is a pricing strategy that varies prices for different customers at different times on the basis of demand conditions. It is commonly used in the airline industry but has also gained popularity in other industries. For example, the Eagles, the highest- selling American band in US history, started a system of increasing the prices of the best scats and lowering the prices of cheaper seats for a show organized in carly 2010 in Sacramento, California. Their highest-priced tickets cost 5250, but the cheapest ticket was priced as low as$32. They cooperated with Live Nation Entertainment Inc. to use dynamic pricing for their tickets. Ten categories of ticket prices were set based on anticipated demand. In this way, the band hoped to fill more scats and at the same time make the tickets more affordable for fans Lion King's success in turning its once-shaky fortunes around and becoming one of Broadway's top grossing shows has been largely attributed to dynamic pricing. Similarly, the San Francisco Giants, a professional baseball team sold 25,000extra tickets during the fi rest year in which they experimented with dynamic pricing. It camed them an extra $500,000 in revenue. Officials from the Major League Baschall and the National Basketball Association expect dynamic pricing to become the norm for the sporting industry. Companies like Score Big Inc. are hoping to tap into this trend. It has been estimated that about 25-35% of seats for sports events and 40 50% of concert tickets remain unsold every year Score Big Inc, aims to become the Priceline.com in this space by using demand-based dynamic pricing to help find buyers for these tickets. Companies in diverse industries such as sports, hotels, airlines, and car rental have been able to benefit greatly from using dynamic pricing. Such a strategy allows companies to increase revenues, allocate their resources more effectively, and focus on improving customer experience. Thus, dynamic pricing is certainly here to stay! On the basis of the above case study answer the following questions (Que 1 and 2) Quel. When there is a complaint about pricing, it's typically the feeling around the price to value, not the dynamic pricing Elaborate this statement with the help of above case. (8 marks)