Some of you may have seen FlyDubai's ads, "Hyderabad to Dubai for Rs 8000. If you want to carry a bag, Rs 650 extra".
Considering that people normally carry at least one bag on such trips, I was wondering if it is not more attractive to advertise the same price as "Hyderabad to Dubai for Rs 9300. Carry two bags free, or get a discount of Rs 650 per bag" or something to that effect...
When a consumer effectively sees the same eventual price, won't a "discount" sound like a "better deal" than an "extra charge"? Especially if the choice is only theoretical.
Rs 8000/- looks more instantly attractive than Rs 9300/- People may rush in to book tickets overlooking the '*conditions apply' clause only to regret later. Companies usually don't mind such cheating (as people think it).
ReplyDeleteNag: Do you think that consumer will go back to such a company a second time, when there is a choice?
ReplyDelete@Siv
ReplyDeleteAs a customer I'll look at the benefit of pricing. On an equal choice, I am unlikely to go back to FlyDubai since I feel cheated otherwise I don't mind going again with it because I realize my benefit also there.
As you know this is a widespread practice whch started with AA in the USA last year. Lot of outcry 1st but then most others followed.In the same way when low cost carriers first came and said food extra and people got used to it this will also become a practice. As long as this is said upfront while booking it should not casue angst. When we are loking for cheaper options we know that there may be some trade offs. Sachid
ReplyDeleteI think the pricing is strongly and sensitively linked to the concept of low cost flying. So, the airlines want to show the base price as low as possible to get the immediate attention of customers who are mostly borderline consumers.
ReplyDeleteThanks for sharing your thoughts, Sachid and Placid.
ReplyDeleteWas an interesting read...My views: we need to know if the price of 8000/- was already in force..and extra baggage price introduced later..May be Flydubai had q's like:
ReplyDeleteI am a low cost carrier: To achieve my budgeted costing, I encourage less luggage load....and wont mind more passenger/human load....but how do I force customers to not bring unnecessary baggage....and what happens to them who want this service and are willing to pay extra (if need be)....then I need to ask: do I have extra carrying space, and if I do, what happens to the costs...who wud fund this extra service.....
Current Problem: Low Cost of operations, space/load constraints
Opportunity/Threat: Customer's dissonance on non-availability of extra luggage space
Additional Service desired: Extra Baggage
Funding Mechanism: Customer Pays
Service Provider's role: Minimal
Customer's role: Minimal
but wud this shift the player in the Price-Quality Valueline matrix....from a pure low cost player to mid-segment player....may be or may be not because of unbundling...:-)...what are other external limitations....only time wud unravel...:-)
Good perspective Prasanna! Thanks :)
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