Pricing and Revenue Management

Question: Explain about the pricing and revenue management. Answer: Recommended Pricing Summary:- Monkey Baa is a popular theatre group of Australia, whose target audiences are mainly young generation. The prime goal of the company is to attract more young audiences towards the new-age theatre. The company wishes to introduce new pricing strategy to make the plays more popular and draw more crowds to the theatre hall. Therefore, the new pricing strategy of the company suggests that there should three different prices for three different groups. The recommended prices for the company are $ 47.50, $63.90 and $ 87.85 for for 2 set of tickets, 3 set of tickets and 4 set of tickets respectively. The new pricing policy can be applied both individually and in a bundle. But the nature of the pricing strategy suggests that if it is applied in bundle it will be more profitable for the company and cost-effective for consumers as well (Ellickson et al. 2012). Determination of the recommended Prices:- The recommended prices have been determined through extensive market research and data analysis. Various audiences have been interviewed with a set of questionnaire. As per the consumers preferences and behavior, three different groups are selected on the basis of the number of tickets. By analyzing several pricing approaches, three individual price ranges are set for the three groups. Then the information, gathered from the consumers, are used to analyzed the different prices under the three groups under two different statistical method. The outcomes of the two methods are further compared with the cost of production and market trend to select the best possible prices for each group (Sauer 2015). Implementation Strategy:- The implementation of the new pricing strategy is also suggested in the report. The implementation can be conducted through various platforms. The social media marketing can be proved to be effective to attract the younger audiences. Moreover, the company can use online websites for distribution of the tickets. Monkey Baa may also adopt various typical advertising strategies to communicate the potential consumers about the new pricing strategy (Bodea and Ferguson 2014). Possible Price Implementation Issue:- The main issue for the successful implementation of the new pricing policy, is the consumer behavior. The success of the theatre industry depends mainly on the performance of the actors and quality of the play. If the consumers do not get satisfied by the quality performance or their preference do not match with the company, the new pricing strategy cannot be successful. Moreover, the average costs, used for the calculation of the pricing, were based on estimation. If the actual costs become higher than the estimation, then also the new pricing cannot be able generate the required profit for the company (McMahon-Beattie et al. 2016). Alternative Pricing Options:- The pricing strategy can be determined on basis of different approaches also. The pricing is set on the basis of quantity of tickets. It can be determined on the basis of the age-group or combination of the different age-group. Moreover, the company may follow the market trend to set a price level. The company can charge different prices for different plays on the basis of the actual production cost, to be incurred for the individual plays. Reference List:- Bodea, T. and Ferguson, M., 2014. Segmentation, revenue management and pricing analytics. Routledge. Ellickson, P.B., Misra, S. Nair, H.S. 2012, "Repositioning dynamics and pricing strategy",Journal of Marketing Research,vol. 49, no. 6, pp. 750 McMahon-Beattie, U., McEntee, M., McKenna, R., Yeoman, I. and Hollywood, L., 2016. Revenue management, pricing and the consumer. Journal of Revenue and Pricing Management. Sauer, B. 2015, "The benefits of variable pricing strategies",Trailer/Body Builders (Online Exclusive.