Pricing

Pricing pushes forward the limits of the possible

Pricing does not only consist in creating prices. It is also the art of segmenting demand in order to push forward the limits of the possible and ensuring that you end up with the High Yield demand.

Pricing segments demand with relevant fare conditions, gives price recommandations to the Salesforce and provides Yield Managers with intelligible and exploitable fare grids.

PRICING HAS A KEY ROLE IN THE REVENUE PRODUCTION PROCESS.

It must:

  • Improve the sales conditions but not make them complex
  • Make the offer more flexible but not weaken it
  • Segment demand but not crumble it into unexploitable groups
  • Follow competition but not copy and paste its prices.

Those 4 ingredients seem simple but the recipe is often more complex.

Pricing must also offer fare ranges available for different markets, and different distribution channels.

It creates prices taking into account costs, competition, product life cycle and demand pressure.

AMONG OTHERS, WE COPED WITH THE FOLLOWING ISSUES:

Definition of the pricing strategy

Hotel chain with a portfolio of 30 hotels

Context

  • Dramatic growth of the company and massive arrival of workers
  • Highly competitive environment : increasing power of distributors, soaring of a new type of competition with AirBnB, downward trend in the market)
  • Premiumisation of the brand (towards 4* and more)
  • Change of PMS.

MISSION

Adapt the Pricing Strategy of the group to enable Pricing & RM analysts to maximise the revenue generated by the current.

In concrete terms, it consisted in defining a Pricing Strategy that would be:

  • Clear and explicit for customers
  • Consistent with the Distribution Strategy
  • Embraced by the staff
  • Exploitable by the Princing & RM Analysts
  • Easy to set up in old and new PMS.
Production OF PRICE GRIDS

Leading European Campsite Group with a choice of 200 destinations

Context

  • Set up of a Revenue Management Strategy
  • Newly created RM team
  • Urge to create price grids for the next season even before CY season lasts.

mission

Create price grids for 200 campsites in order to make a RM strategy application possible.

In concrete terms, it consisted in drawing up price grids that would:

  • Be wholly consistent but would consider each campsite’s pressure of the demand
  • Reflect demand seasonality from one week to another
  • Apply coherent price differences between the various types of Mobile Homes whatever their capacity
  • Offer an early booking discount and other formulas for Tour Operators and Workers Comitees
  • Offer price automation for long stay contracts.
AUTOMATION OF FARE GRID PRODUCTIONS

Cruise Company

CONTEXT

  • Data dispatched into many Excel files (historical analysis of sales, prices, etc.)
  • Manual updates with copy and paste from a file to another
  • Decentralization of information
  • E-mails as means of communication.

MISSION

Develop a pricing tool that would gather all needed variables and that would automatically create Set Up Files.

In concrete terms, it consisted in developing a tool that would:

  • Display at once all information needed to make decisions (On the Book, Change Rate, revenue leakages, sales formulas, etc.)
  • Simulate calculations based on fare hypothèses
  • Monitor price differences between the various types of cabins
  • Precalcultate the set up on the customers’ price basis
  • Keep  prices history in a database for reporting matters
  • Draw up set up files to later upload them in the booking system
  • Inform the staff about the availability of the set up files.

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