Distribution & Pricing

Description Distribution: Discuss the disruptive impact of electronic format distribution of products such as books and music. How have these industries changes? Pricing: Define revenue management and using examples, show how businesses are using it to improve pricing strategy. Your initial post of each question should be at least 200 words and it is worth 14 points. You should respond to at least two of your peers by extending, refuting/correcting, or adding additional nuance to their posts. Your reply posts should be at least 150 words each. All replies must be constructive and use literature where possible. Student Post Collapse SubdiscussionPol, Arlette Pol, Arlette WednesdaySep 25 at 11:21pm 1. Technology has had a disruptive impact of electronic format distribution on products such as books, movies and music in a wide variety of ways. We live in an era where we have access to anything and everything at the tip of our fingers through the internet. Although this is a great benefit to consumers, it can cost a company a lot of money. For example, authors who write books make money when the books are sold, but if a PDF is leaked on the internet of the book, nobody has to buy the book because it can be read off of a website by simply googling it. An example of an occurrence like this is when Stephanie Meyer was writing a book called Midnight Sun, which was based on changing the 1st person character of Twilight from Bella to Edward. Before she finished the book, there was a leak of twelve chapters of the unfinished manuscript on the Internet. For years, she refused to finish the book due to the event. When it comes to movies and songs, they too can be copied. There are websites where movies in theaters can be watched. This leads to people not paying to watch the movie. 2. Revenue management is defined as helps to predict consumer demand to optimize inventory and price availability in order to maximize revenue growth. Proper revenue management acts as an indicator to predict consumer behavior and optimize product availability and price. This is done by deciding price based on forecasted demand, price elasticity and deciding upon competitive rates. This is often used in the hospitality industry. Some examples of where it is often used is hotels, airlines, cruises and rental car companies. It is often used in hospitality because in that sector of the market, the “wants” and “needs” of consumers is changing year round. For example, why would a Disney cruise have the same cost in June as in September? Although only 3 month difference, June will have a higher demand for a vacation that September because in June, kids are on summer vacation and school will not interfere. However in September, school begins and students will not be able to easily get a week excused to be on a cruise. Also, the weather will have a last effect. In June, there has been an average of 0.8 hurricanes and tropical storms, versus in September, there is an average of 5.9. This equates to September having more than 5 times more hurricanes than June. Why would somebody plan a vacation months ahead with the likelihood of a hurricane ruining PTO? Due to September not being as popular in some months, promotions and discounts can be offered to increase sales. However in popular months, prices will increase.

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