Thursday, March 18, 2010

Pricing on demand

I listened to an YLE radio interview of CEO Risto Juvonen from Live Nation, a concert organizer in Finland. Risto Juvonen was predicting a change to pricing model of concerts in a few years time.
Juvonen predicted a similar model for concerts as is the case for flight tickets currently; you don´t know what the person sitting next to you is paying for. There will be the ones who are willing to pay more for better seat or better service, as some are willing to have less for a smaller amount of money.
What would you be willing to pay for a concert? Or an airline ticket? And what would you pay for? A seat in the first row? Good food and service? Great lounge and shopping arrangements? In-flight entertainment or the actual show? Having a sense of belonging or travelling to a trendy destination? Again, this direction requires more specific customer segmentation and being able to tailor service offering accordingly. Which other industries will this concern? Gyms, restaurants, sports events, parking, public transportation? And how far will it go? Backseat passes, pick-up from home, dinner, merchandising included?

Hanna Viita