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How do you make a pricing strategy for the tourism business?



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Deciding on a pricing strategy for a tourism business is wholly dependent on the businesses marketing objectives. The strategies developed are affected both by the internal factors and external factors. Pricing Strategies fall broadly under two categories: Profit Oriented; and Non-Profit Oriented. The profit oriented looks at ways in which the maximum profit can be obtained for the product/service. The non profit oriented could be either sales oriented or status quo oriented. Sales oriented could see the business try to maximise sales through reducing prices, the idea being that you stack high and sell low. By setting prices low, and excitement for new products is produce, which generates more customers/sales. This is also use to grow the market share, where the long term benefit is more important than immediate profits. Status Quo oriented can be for the companies survival in an economic slump, and the business has too much capacity, or when there is a change in the customers wants. Status quo also us used to obtain a dominant market position, and maintain that position and market share. The belief is that the company with the highest market share will eventually enjoy low costs and high long-run profit, so prices are set as low as possible, and these low prices create demand for the product/service, and as the demand increases, the low-revenue business is replaced with higher revenue business as the prices are raised.