Question

what is time based pricing and how is it used? in 200 words and in own words please

Answer 1

Answer: The time based pricing is a dynamic pricing strategy in which the companies set flexible prices based on the current market demand that exists for any product or service. This is a very common form of pricing strategy that is used in many industries like tourism and hospitality. The demand for many types of products follows a seasonal trend and hence the companies use such type of pricing to stimulate demand and create uniformity in it. The fluctuations in demand often result in improper utilization of production facilities and also wastage of resources during the low demand periods. Hence in order to maintain uniformity in demand the companies price the products less during off season or low demand period so that demand does not faces away and some level of demand is maintained. Similarly during the peak seasons the prices are increased so that the losses during the slack season may be covered.   For example in the hotel industry, the hotels charge a higher rate for a room during the tourist season and slash their prices during the off season in order to stimulated demand. Similarly there are certain taxi services that charge more from the passengers during the peak hours of traffic in the city.