Business Pricing Strategy: Marketing Assessment Answer

MAS1290

Marketing Report Writing Assignment:

Why heavier people should pay more to fly:

If you’ve put on a few kilos over the festive season then reading this article may not be to your taste – particularly if you’re about to join the throng of Aussies heading overseas for a holiday. To cut to the chase: people who weigh more should pay more to fly on planes – in the same way that people who exceed their baggage allowance must fork out extra. The rationale is simple. The fuel burnt by planes depends on many things but the most important is the weight of the aircraft. The more a plane weighs, the more fuel it must burn. If the passengers on the aircraft weigh more, the aircraft consumes more fuel and the airline’s costs go up. In turn, the airline will need to lift airfares to recover these additional costs. And when they do, the burden of these higher fees should not be lumbered on those who are
shedding a few kilos or keeping their weight stable. In fact, airline fuel costs have increased since 2000 not just because of higher oil and jet fuel prices – although these are by far the most important drivers of higher costs but also because the average adult passenger is carrying a bit more heft. Between 1926 and 2008, the average weight of an Aussie female adult increased from 59 kilograms to 71 kilos and the average weight of an Aussie male adult increased from 72 to 85 kilos. These increases represent weight gains of around 0.23 per cent and 0.20 per year for woman and men, respectively. Since 2000, the extra loading that an average adult passenger carries is about 2 kilos.

1.understand the objectives that guide pricing strategies

2.analyse demand to inform the development of an appropriate pricing strategy

3.describe the principles of pricing based on costs

4.explain the role of competitive analysis in determining pricing

5.appreciate the issues involved in pricing for business markets

6.understand how to manage prices as part of the marketing mix.