Pricing Strategy of Alitalia (Airline)

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Pricing Strategy of Alitalia Airline

Executive summary

Price is very important to the seller of any good or service who wants to make a profit . This is due to the reason that most consumers first look at the price , before considering whether or not to buy a good or service . The sellers have to be very careful when setting price , so that the good or service does not appear to be very expensive , since this will discourage the potential clients from purchasing them

(Schade and Schlag 2002 : 43-52 (McGrath 2000 : 37-43 . On the other hand , if the good or service appears to be too cheap , the clients will be suspicious of it . There are many strategies that are used by sellers in pricing their goods or services . These include loss leader , price discrimination , cost plus , penetration , limit , predatory , premium creaming , marginal cost , target pricing among others (Yates 2003 22-29 (Nagle and Holden 2002 : 26-37 . This will analyse Alitalia 's problems regarding pricing , among other factors

Introduction

Alitalia is an Italian airline that began operation in 1947 , and transports cargo and passengers in several destinations throughout the world . This airline serves twenty five Italian airports , forty five airports in North Africa , Europe and Middle East . According to Iatrou and Oretti (2007 23-28 ) and Hanlon (2007 : 26-28 , it is one of the members of SkyTeam , an airline alliance that includes such major airlines as AeroMexico , Aeroflot , China Southern , Air France and others . Last year , the airline...