StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Pricing Strategy: Case Study of Eurotunnel - Essay Example

Comments (0) Cite this document
Summary
The proposal of the tunnel connecting England and France under English Channel has been a matter of planning and cost overrun business over the decades. When it could not be denied that a tunnel would serve significant advantage over the traditional ferry services that were used…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.8% of users find it useful
Pricing Strategy: Case Study of Eurotunnel
Read TextPreview

Extract of sample "Pricing Strategy: Case Study of Eurotunnel"

Download file to see previous pages After opening of the tunnel in 1994, huge enthusiasm among people was observed. People interested to cross English Channel in an easier, comfortable and shorter time compared to the traditional ferry services. On the other hand, traditional ferry services were preferred by most of the tourists and traditional customers because of the sense of enjoyment and safety aspects of the ride (Besanko and Stori, 2006).
This report is intended to discover the effectiveness of channel tunnel built and operated by Eurotunnel with respect to the traditional ferry services. The analysis is based on the cost and pricing of these two services. A careful analysis of the case study along with the standardized pricing model used by Eurotunnel can give an insight of the relative advantages or disadvantages of one service on another.
The pricing strategy used by Eurotunnel is the traditional cost plus pricing where the price is set according to the predicted cost of producing and delivering the product/services. According to this theory, pricing of every product or service is targeted to earn a fair return over all costs that are fully and fairly allocated. Although this type of pricing ensures fair return above any cost figure, it generally results in mediocre financial performance. This is the way of improving the firm’s profit by increasing the production until marginal revenue of the product/ service is equal to the marginal cost. Thus, in this method, marginal cost is an important element and it is assumed that marginal cost of any product results in cutting down the profit figure of a business. There are certain advantages of using this method, for example, in case of handling many products, a firm can successfully implement cost plus pricing by which fair prices of products can be easily achieved. This approach of pricing involves full cost of production and thus, this ensures that the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Pricing Strategy: Case Study of Eurotunnel Essay”, n.d.)
Pricing Strategy: Case Study of Eurotunnel Essay. Retrieved from https://studentshare.org/marketing/1639842-pricing-strategy-case-study-of-eurotunnel
(Pricing Strategy: Case Study of Eurotunnel Essay)
Pricing Strategy: Case Study of Eurotunnel Essay. https://studentshare.org/marketing/1639842-pricing-strategy-case-study-of-eurotunnel.
“Pricing Strategy: Case Study of Eurotunnel Essay”, n.d. https://studentshare.org/marketing/1639842-pricing-strategy-case-study-of-eurotunnel.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Pricing Strategy: Case Study of Eurotunnel

Prestige plastics (PP) pricing problem

...?Major Facts Sue, being a graduate majored in materials management, discovered a pricing problem while working at a manufacturing firm d PrestigePlastics (PP) operating as a supply manager. Her job description consisted of purchasing chemicals for the firm’s plastic productions. The problematic chemical purchase for Sue was that of a chemical called X-pane made specifically for PP. A bid for this chemical was forwarded to six suppliers with an annual requirement of 10,000 drums. The Chicago Chemical Company bid the lowest. Greater Sandusky Chemical said it was impossible to bid that low based on approximate production costs of $750,000 amortized over the one-year contract to reduce loss. Other bidders agreed with this statement. Sue...
3 Pages(750 words)Case Study

Pricing Strategy

... the demand and supply relationship of the product. Firms need to charge a fair price, since charging too high for the product or too low might lead to reduction in sales for the organization thus reducing the profitability of the organization. Therefore, there is a need for the hotel to consider the profit factors in determining the price of the product. In this case, the profit factors includes; the objectives of the company, variable and fixed cost associated with the product, the targeted market and willingness and ability to pay, the competition environment prevailing in the industry and planned positioning strategies (Smith and Smith 271). In the consideration, of the above classification, the place or rather the location of the hotel...
3 Pages(750 words)Case Study

Pricing of real estate

... use and upgrading decisions. Funding options cover the choices between debt and equity funding, including the many varieties in between, as well as the insurance, default and prepayment options in mortgages and mortgage-backed-securities. Finally, property industry strategy real options view patterns of the timing of innovation and new developments, in the context of competition and rent cycles". (Patel and Sing, 2005: http://www.rics.org/Property/Propertyappraisalandvaluation/review_of_practical_uses_real_property_options.html) The use of real options in real estate pricing can be illustrated by a case study reported by Steven H Ott, detailed as Appendix. (Ott: http://www.belkcollege.uncc.edu/real_estate/pdf/Real%20Option%20Review%20and...
14 Pages(3500 words)Case Study

Pricing Tourism Services

...Case Study One: Pricing Tourism Services: Interview with Geoff Rollason, CFO Story Bridge Adventure Climb Brisbane. According to the speaker, Geoff Rollason, the purpose of undertaking the market research study is two-prone. In the first instance promoting tourism related services such as adventure climbing in Brisbane depends on the pricing strategy of the firm because people take price as the first and foremost indicator of affordability. So the attitude of the people to price must be ascertained first. Secondly the comparative advantage that Sydney in particular has over Brisbane has to be taken into consideration. Demand for and supply of a product depend on a number of endogenous and exogenous variables. Then there is a set...
8 Pages(2000 words)Case Study

Change Order pricing

... Change Order Pricing Questions Is the contractor’s argument a reasonable one? Answer: Yes, it is. It will take alot of time to deconstruct then rebuild the electronic devices than to assemble it directly. Hence, the working hours of the laborers will be longer than the usual time they need to finish the process. 2. What should the buyer do? Answer: The buyer may agree to the proposal of the contractor to adjust the number of hours needed for the removing changed worked. However, the buyer must insist that the old labor rate should be maintained instead of increasing it for the change work. 3. Do you agree with Mr. Foster’s approach, viz.: using the labor rate used in the original proposal to price out the work associated with the change...
4 Pages(1000 words)Case Study

Pricing Strategy (Case Study: Haier in India)

...Pricing Strategy for Haier Company in India Table of Contents Introduction 3 Haier’s Pricing Strategy in India 4 Pricing Strategy Recommendation 5 References 7 Introduction Haier Inc is a Chinese Company that produces appliances for retail. It has a market presence felt not only in China but has markets in Europe, Italy, the United Kingdom, Luxembourg, Belgium, France and in Asia as well. When Haier ventured into its overseas markets, they adopted a strategy where they would have a local goods production, set up a sales strategy and also produce products that would be able to cater to the needs of the local present. Over a quarter of a century has passed through which Haier has evolved from an unknown refrigerator factory into a leading...
4 Pages(1000 words)Case Study

PRICING STRATEGIES

...Pricing Strategies of Case Study, Health sciences and medicine Pricing Strategies There can be a number of pricing strategies that a pharmaceutical benefit manager can use to cut down the rising costs of health care products and services provided by the employers and also improving the quality of care for patients. Utilization Management Strategy It is observed that an employer has the potential ability to save thousands of dollars just by eliminating the inappropriate and unnecessary prescriptions filed by their employees. Consider that an organization has 5,000 employees. The average prescriptions filled by each employee are 8 and the cost per prescription is approximately $5, it means that the employer can save (8*5=40 each year, 40...
2 Pages(500 words)Case Study

The Strategy and Tactics of Pricing

...The Strategy and Tactics of Pricing Major Facts/Problems In 1998, Steve Marsh noted a disturbing trend regarding the sales of the PSX-360 retail channel. There was a high dependence on some orders from the PSX’s major dealers. One of the dealers was in New York, and the other was in Los Angeles. By April 1998, the dealers had accounted for approximately 70 percent of the total sales of the company’s total PSX products. There was increasing complaints from other PSX dealers who were losing their sales to other retail dealers outside their territories. They linked the sales losses to huge discounts being offered by the major dealers in New York and LA. If the customer were in need of the PSX-360 unit, he would just visit the local dealers...
6 Pages(1500 words)Case Study

Tata case - pricing

... primary pricing objectives were also related to the factors that influenced the pricing of Nano. However, the objectives seemed to be a long-term strategy aimed at not only beating competition but also being the number one preferred brand for Indians and other middle income economies. These objectives included developing customer loyalty, beating competition and meeting the strict budget requirements that is the case for middle income Indians and also making a car that is very easy to market in its target markets. The other factor that had the impact on the decision to tag the car at this cheap price is the operation base. India has an increasing population of middle class who works on tight budget but would still love to travel...
4 Pages(1000 words)Case Study

Pricing Structure- ABC Costing System

This strategy was mainly tied to distribution division and supply chain of the company and as the company noticed the profit of the firm declined they arose a serious business issue. The main issue here is that the company found out that there was problem in the cost listed in the clients account and hence it directed discrepancy in the accounting of distribution division which needed immediate attention.
The current pricing structure employed by the company is competitive pricing structure. The competitive pricing structure is a phenomenon where the price of the product of the company is set keeping in mind the price set by industry competitors. In this kind of pricing structure the focus is on the attributes of the product,...
5 Pages(1250 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Pricing Strategy: Case Study of Eurotunnel for FREE!

Contact Us