Case Study: Airfair Pricing Strategy

Step 1 – Creation

1. Create algorithm for pricing strategy: Allegiant is going to use an outside company to write the code to create a new pricing algorithm in which optimizes revenue and provides customers with excellent prices. Allegiant is going to pay the company Ticker to write the code. Ticker specializes in maximizing revenue for ticketed events and services (Trahan).

2. Reexamine buying process: Allegiant will need to reexamine the current buying process of consumers to better understand the length and steps buyers go through. This will help the marketing team develop a plan to penetrate the market.

3. Hire project manager & team: We will be searching from within the organization to hire a project manager and team around them. This

Create brand around AirFAIR Pricing: The marketing team needs to begin creating promotional items to brand the new pricing scheme. Allegiant will want to make it as “the new, fair way to fly.” By doing this Allegiant can build a brand and a more loyal customer base.

3. Select target dates to beta test- At this point the management team will have to determine if the AirFAIR Pricing strategy is ready for launch. If so, the AirFAIR Pricing scheme will apply to flights in eight months in advance because this is the length that Allegiant Air schedules its flights.

4. Create promotional materials: the marketing team will be responsible for creating promotional material to assist the customer in understanding the new pricing strategy. These promotional videos will need to be very informative so the customers can understand the pricing model. This pricing model will be new to mostly all of our customers.

5. Hire additional customer service representatives: AirFAIR pricing scheme will cause people to have more questions. Allegiant will need to hire extra customer service representatives in order to control the increase in questions and

Email reporters and send out news releases announcing AirFAIR pricing system: Allegiant Air will need to capitalize on free press. We envision news companies wanting to do short press articles talking about our new innovative pricing scheme.

2. Launch AirFAIR Pricing: AirFAIR Pricing will start 8 months before the first flight since that is the length that Allegiant allows customers to book their flights (Travel Info).

3. Ensure customer service superiority: AirFAIR Pricing will have some customers confused and frustrated. Allegiant needs to ensure that the customer service team is able to answer all customer questions. Allegiant will want to allow customers choose their preferred form of communication whether that be phone, live chat, or email.

4. Generate media for new pricing system: To get our customers to recognize our new brand in the beta cities, Allegiant is going to perform a lot of marketing. Marketing ideas for these regions include:

a. Email the people in the area about the new promotion

b. Use behavioral targeting online web advertisements

c. Ad campaign based upon people’s reactions that they paid more than everyone