Price Lining

What is the definition of Price Lining in the hotel industry?

The term Price Lining, is used to explain a marketing/ pricing strategy, whereby a business prices its products according to value, features and attributes in order to differentiate them from alike products. By doing so the corporation makes the feature of quality for consumers more noticeable. Significant for this is that the price, vary enough to hint the disparity – as if its kept on a similar level it can reason more misunderstanding than help in purchasing decisions. This pricing policy allows businesses to sell similar products with small differentiation to different segments, with different budgets. Thereby the corporation is able to aim a broader vary of customers, thereby increasing sales and not absent out on purchaser segments.

Having such a pricing strategy in place increases the appearance of affordability and allows customers to stay with one brand with their purchasing decision, not having to make price the distinguishing factor for choosing between brands. Therefore price lining makes shopping easier for consumers – as they can clearly differentiate excellence differences with no help from store managers/ employees. Price lining may relate to your Revenue Management strategy.

The drawback of price lining is that it also puts price as the key driver of purchasing choices.

And whilst price lining can be advantageous, it relies on a quantity of factors and is therefore not suitable for every product/ service.