Dynamic Pricing Models
Pricing strategies that adjust prices in real-time based on demand, competition, and other factors, often used to optimize sales across different channels.
Implications
Pricing strategies that adjust prices in real-time based on market demand, competitor pricing, inventory levels, and other factors, often using algorithms and data analytics to optimize revenue and profitability.
Example
Example: An airline employs dynamic pricing models that change ticket prices based on factors like time to departure, seat availability, and competitor prices, maximizing revenue by charging higher prices during peak demand periods.
Related Terms
Different from fixed pricing, where prices remain constant, dynamic pricing continuously adapts to changing conditions, allowing for more responsive and profitable pricing strategies.
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