Ah, variable pricing. The never-ending possibilities. Let’s talk about it.
Variable pricing is when prices change based on a region, location, date or other aspects. This is also known as ‘real-time pricing.’
The obvious example (and the one that everyone uses all the time) is airline prices. Airline prices depend on so many factors: destination, origin, time of day, day of week, the number of people who are buying tickets, how early you purchase them… They can change from day to day. They can change throughout the day.
Online markets (Amazon ring a bell?) are another example of variable pricing. Things like book prices change regularly depending on demand. The Hunger Games books, for example, went up in price (and will go up in price again) when there was hype surrounding the book. Prices have since gone down.
The main reason people use variable pricing is to increase revenue. Keeping prices low when demand is low will encourage people to purchase the cheaper option (I cannot even tell you how many times I have flown at an ungodly hour because the flight was cheaper). Charging extra for a more popular option, on the other hand, allows companies to capitalize on demand as people are “fighting” for those items and are willing to pay more to get it (like plane tickets on Friday afternoons at 7:00 pm).
Now the question is how can sport leagues use variable pricing and are those that are already using it (the AFL, for instance) doing with it?
OF COURSE I’m going to tell you.
Because you need a short post every once in a while. So here you go.