Amusement parks, baseball clubs and other entertainment businesses in Japan are increasingly adopting dynamic ticket pricing in a bid to avoid creating crowds amid the COVID-19 pandemic while stabilizing revenue. Those businesses hope that dynamic pricing will help bring in more customers as tickets are cheap on days with low demand. The ticket sales market in Japan in the year ended in February 2021 shrank to a quarter of that of before the pandemic, according to Pia Research Institute, an arm of ticketing agency Pia Corp. Meanwhile, the total value of dynamically priced tickets sold in the country is expected to grow by 1.5-fold to around ¥6.2 billion in the year ending this month from the previous year, according to Dynamic Plus Co., a Mitsui & Co. unit that uses artificial intelligence to offer dynamic pricing services. Under a dynamic pricing plan, prices are changed depending on demand until the day of the event.
AI-based dynamic pricing is becoming a science. Companies are using data to determine demand and competition, and then they influence prices in real time. When you experience a spike in the cost of an Uber after a concert, for example, that's artificial intelligence-based dynamic pricing at work, or "surge pricing," as Uber calls it. This technology can also use data to determine what a customer is likely willing to pay for a product. With this insight, artificial intelligence can compare a retailer's pricing to its competitors to see where they land in comparison.
Traditional policy pricing strategy used by insurers has leaned towards being inflexible, unwavering, and manual. Customer-specific variables are not considered in their one-size-fits-all approach. The strategy has seen success in the past. However, insurers today face a new generation of customers with new expectations of timely service, transparency, and individualized offers - The Gen Y and Z customers. And, newer technology-based insurers are quickly filling the dynamic policy pricing gap in the industry.
Basically, this means determining the most your customer would be willing to pay for your product or service. Value-based pricing is less effective in very heavily saturated market, where you are more likely to be undercut by another business. Ideally, you should be able to offer higher quality, more convenience, or more streamlined experience in order to succeed with value-based pricing. An example of value-based pricing would be if you were a website designer who typically charges by the hour. As you become more skilled and can offer a high-quality product in a few hours, you may be designing a client's entire website in half a day at a bargain rate.
The company rolling out Australia's National Broadband Network (NBN) has said it is about to begin another consultation period with retail service providers (RSPs) on its connectivity virtual circuit (CVC) wholesale pricing, with an "evolved model" expected to be implemented at the start of 2017. "We've recently implemented an industry-based discount model, ensuring the CVC price falls the more bandwidth retailers allocate to each of their customers," NBN told ZDNet in a statement. "The CVC price fell by AU 1.75 in June this year and we expect it to continue to fall as demand for bandwidth grows; that's the way the model is designed. We continue to review our pricing structure to ensure it supports uptake and usage, and meets our obligation of providing broadband at affordable prices. "NBN is working to evolve the CVC pricing model to an RSP-specific discount structure.