Airport transfer pricing strategies
There were too many gateways to manage prices effectively and the company was losing margin opportunities due to lack of a rigorous and scientific pricing approach.
By measuring cannibalisation effects and elasticities at gateways, we concluded that bringing prices of shuttles and private transfers closer together would create better margin opportunities. After quantifying the impacts of price moves by product and gateway, we implemented a new pricing plan. Finally, we created a dashboard to monitor impacts of price moves and to complete any subsequent refining.
Margins improved by 2.1% as percentage of sales while ROI was quadrupled.