Price Sensitivity and Pricing Decisions
Pricing strategy is the central component in overall profit performance. This online course prepares participants to anticipate the impact certain pricing decisions will have on consumer demand and thrive in a highly competitive environment.
Participants will learn to measure demand sensitivity to price changes, measure the overall impact and even analyze and improve upon their competitors’ strategies. See how pricing strategies in economic declines can bring volatility and bring about a “price war” situation, like that of the airline industry. This course also provides the tools to conduct a break-even analysis, which is used to determine a baseline volume and price that will generate positive revenue.
Closely aligned with the break-even analysis is the concept of price elasticity, which is the measurement of change in demand as it relates to a change in price. By measuring demand sensitivity, running a break-even analyses and forecasting price elasticity participants will be able to develop a measured, data-driven approach to pricing strategy geared toward positive revenue generation and sustained profitability for their operation.
Participants who complete this course will be able to...
- Employ a strategic proactive approach in pricing decisions
- Evaluate the effectiveness of price elasticity in pricing decisions
- Estimate price sensitivity when formulating pricing strategies
- Use mathematical modeling to analyze variable pricing strategies
Module 1 - Price Sensitivity and Its Impact on Pricing Decisions
- Industry Characteristics and Price Wars
- Impact of Price Changes
- Break-even Analysis
Module 2 - Measuring Price Sensitivity
- Economics of Elasticity
- Use Elasticity to Evaluate Price Sensitivity
- Correlation Versus Regression
- Linear Regression to Evaluate Reservations
- Use Fair Share to Estimate Elasticity
Who should attend
This course is designed for general managers, revenue and finance managers, operations, sales, marketing and other hospitality professionals who are responsible for the financial performance of their organization. Professionals with at least 3 years of experience in their industry will see the greatest benefits. This course provides advanced instruction in revenue management and teaches the industry-critical skills and advanced techniques used by top performers the world over.