Why Do the Airlines Charge Less for Passengers Who Stay

question 50

Essay

Why do the airlines charge less for passengers who stay over Saturday night and purchase their tickets two weeks in advance?

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Definitions:

Price-sensitive

Referring to consumers whose buying behavior can be significantly influenced by price changes of products or services.

Penetration Pricing

A pricing strategy where a product is introduced to the market at a low price to attract customers away from competitors, with the aim of quickly gaining market share.

Skimming Pricing

A pricing strategy where a high price is set for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price.

Penetration Pricing

A market strategy where a product is introduced with a low price to attract customers and gain market share before eventually increasing the price.