Monday, August 27, 2007

Rip-off Ryanair?

I am still in the UK, where there hasn’t been much of a summer, except for this bank holiday weekend, which has been absolutely magnificent. So while I was reading the papers over the weekend, I stumbled across the news that the folks at Ryanair are about to start charging £4 to check-in. Don’t believe me? Read it here.

I tend to agree with the comments in this article that this charge is pushing things just a little bit too far. Yes, the low cost airlines have unbundled the traditional flight ticket to a pay-as-you-go model, and they have made air travel more affordable to the masses. But, to be blunt, this charge will piss customers off. And it should play nicely into the hands of airlines like easyJet (no, I don’t own stock, but I did used to work for Stelios), provided they don’t become too greedy.

Guess I was wrong with my February 2006 prediction that the toilets would be the next thing to be monetized.

Monday, August 20, 2007

Some news on supermarkets and search engines

One of the main differences between an everyday low pricing (EDLP) strategy and a high/low pricing strategy is that the former is often retailer lead, while the latter can be more supplier lead. Today’s edition of The Guardian newspaper carries a story on just how much an EDLP strategy may be retailer lead.

When I was last here in the UK in June, a banana price war broke out, and subsequently spread to other products. In the process of completing a study on the way the UK supermarket industry operates, the Competition Commission has discovered that a couple of the supermarkets may have been a bit too demanding of their suppliers during this price war. You can read the full Guardian story here.

Meanwhile, and this isn’t exactly a pricing story, Google is finding itself in a bit of hot water of late. As this story tells, it is reportedly being sued by American Airlines, who are finding that users who search for the airline are being given sponsored links to AA’s competitors in the search results. A similar practice was discovered in Australia a couple of weeks ago. A search engine, such as Google, is a two-sided market. It must please both its users and its advertisers, though Google only monetises one side of this market (the advertiser). But clearly, failure to provide its users with relevant search results can be detrimental to its cost-per-click revenue stream.

Friday, August 10, 2007

Pricing Nostalgia

This week’s blog posting is all about pricing nostalgia. You may recall my posting back in November last year about the price of U2 tickets….in 1984 ($19.90).
Well during the week, I stumbled across a website with a fantastic name ( which sells T-shirts with old (and some not-so-old) concert tickets printed on them.

There have been many reasons put forward for concert ticket price inflation over the years. Some authors have blamed The Eagles (people were always going to pay once Hell Froze Over), while others suggest that as sales of recorded music has declined (thanks to Napster, and more recently iTunes), artists have re-balanced their revenue stream, by increasing live performance ticket prices and thus revenue.

It’s great to flick through the t-shirt designs on offer on this website, and not only see some of the prices (Woodstock at $8 per day, or $24 for all three days – perhaps bundling hadn’t been invented then?) as well as some of the support acts (Bob Dylan with Eric Clapton and his Band).