Pricing Assignment

Pricing Assignment – Group10

Industry -Aviation/Airlines

Company – Jet Airways

1. Pricing Objective:

   When Airlines put in capacity (seats) and frequency (flights) between any two points, they market research the route in order to arrive at the total potential for that segment. Size of the market is determined to decide the price. Pricing or fare levels are arrived at after taking into consideration various factors like type of aircraft, configuration of aircraft (number of seats), density of route, competitor activity and minimum breakeven cost.

   Jet Airways Ensure that the pricing strategy maintains the competitiveness of Jet Airways’ in the market place at all times. They closely monitor competitors’ pricing activities, market trends, evaluate pricing recommendations, suggest pricing promotion and devising creative pricing strategies for both domestic and international markets.

2. Competitor Price Mix:

   Kingfisher Airlines uses a Skimming price strategy. Low Cost Airlines like Air Deccan, Spicejet, Indigo, Goair, etc go for value for money to charge lower by operating cost cuts. In this scenario Jet Airways introduced JetLite to compete in the all-economy segement.

3. Pricing methods:

   The airline industry is often cited as a dynamic pricing success story. This allows companies to adjust the prices to correspond to a customer’s willingness to pay.

   Jet Airways employs Affordability-based pricing which is a combination of various pricing methods namely Premium pricing and Value-for-money pricing. In Premium pricing the airlines may set prices above the market price benefited by its ‘brand-image’ to reflect the quality of their service. The value-for-money pricing they follow low and simple fare structure .The airlines provide basic services and just one class.

4. Final Price:

This industry is highly price sensitive. Value-for-money pricing seems to be the best option considering the fact that people opting for premium services are less.

*Posted on behalf of CRM Abhishek Sharma due to some technical glitches

Participants:

Abhishek Sharma

Anik Kar

Anoop V. M.

Bhavesh Agrawal

Sunny Dwivedi

Ritika Mittal