Then auctions like eBay are another example of dynamic pricing.

It turns out we made this pretty easy.

I could actually price on specific customer segments or on features I know they need.

What s the revenue stream. That s our strategy.

Set a price for this item

That just means that the last three yield management, real time, and auctions are examples of dynamic pricing.

They want to encourage high volume purchases, and so they have stepped pricing that is oriented to create volume.

Let's take a look.

In companies do you know how much each individual department can sign off for?

licensing and intermediation and direct sales, etc.

But there's another type of pricing.

It should be a value based decision.

One is fixed prices.

And then kind of the third common errors, my price hast to be less than my competitor's price.

Cost plus market, value pricing, and volume price are all examples of fixed pricing tactics.

What was the market size? What share could you take?

But how do you think about pricing itself?

The stock market is a real time market.

Here's how it is. It's the fixed price.

We'll just add a markup that is a profit, and therefore we have a price.

There's no haggling.

That's a mistake.

We are essentially saying the demand, the Price Quantity demanded relationship is held constant and we can pick a price and we'll get a certain quantity demanded.

How hard can that be?

And you will see later that pricing is a tactic.

Is it a license or subscription model?

But there are two types of prices.

And you know that it's going to be 100.

As we said, the same with pricing.

I'm going to talk about two stories today.

The first three cost based pricing, value based pricing, or volume based pricing are all examples of fixed pricing tactics.

That revenue model is different than the pricing tactics.

It's very simple. It's cost plus markup.

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Last point, last graph.

Negotiated prices is a dynamic price.

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Well, let's put a tax on oil that is a non revenue tax, and it basically says for the next 20 years, the price of oil will be whatever you want, 35 bucks, 40 bucks.

Preston promised his car would sell for 1,000.

And that's the real big take away I wanted you to get at, is that high utilization of anything, of our aggregate capacity, prices will increase.

So the first one I'd like to parce is the idea of market value.

You're going to have an incredible advantage in thinking about revenue and pricing.

So I'm just going back to what I said earlier.

But what's interesting is inside of each revenue stream, you may have different pricing tactics.