Indicative content:
• Variable pricing is a commonly used policy
• It can be used to attract customers when there is less demand, for
example in low season, when different rates are charged in low
season than high season
• It can also be used to attract customers by setting different rates for
different customers, for example children may be charged at a
reduced rate, or families may be charged a different price
• This is attractive to customers as it is seen as value for money and
so helps to gain customer satisfaction and enhance brand image
• It is a flexible policy for the provider
• The disadvantage is that there may be less revenue and it may not
help long term planning
Use level of response criteria:
Level 1(1–3 marks) At this level candidates will identify 1, 2 or more
aspects of variable pricing e.g. seasonality, concessionary prices for
different groups, demand for products or services.
Level 2 (4–6 marks) At this level candidates will explain 1, 2 or more
reasons for the suitability of variable pricing.
Level 3 (7–9 marks) At this level candidates will evaluate 1, 2 or more
advantages and/or disadvantages of variable pricing. Candidates scoring
9 marks will attempt a conclusion about its suitability as a pricing policy
within the context of the question.