Distribution: Discuss the disruptive impact of electronic format distribution of products such as books and music. How have these industries changes?
The recent advances in technology have changed the way businesses were operated. The book publishing and distribution and the music industry are some of the examples which shows how disruptive a technological advancement can be. For the digital goods industry, the economics of digitization have an impact which has provided challenges to the businesses. From digital music to online magazines and e-books, we have seen the public and businesses switching from books and libraries to e-libraries and music. The disruption brought by Amazon Kindle and other e0books businesses has changed the way consumers used to consume these products, making paper books obsolete. It has also occurred in the music industry as well. With the arrival of iTunes, Apple has changed the way music was accessed, distributed and listened to. It shows how disruptive technology can be and how much impact it has on the whole industry and its tradition and conventional distribution strategies (Zhu, 2004).
Pricing: Define revenue management and using examples, show how businesses are using it to improve pricing strategy.
Revenue management is the utilization of the pricing strategy of the product or service for the increase in the generation of profit for a company from the limited available supply chain assets. It is about how the demand and capacity are matched and how the prices affect the demands of a company. Business does this by offering different prices to different customer segments, their availability of product, and as based on their time of use for the aim of increasing the supply chain profits. Common examples of this are airline ticketing. The pricing of airline ticking is as based on the various customer segments and based on the time of the use. The pricing is also different and dependent based on the reading days (that is the number of days until the departure) of the customer segments. It is based on the concept that the value of the product varies for each customer segment. Therefore, as dependent on this the profit-making should be varied as well (Kimes, 2010).
References
Kimes, S. E. (2010). Strategic Pricing through Revenue Management. Retrieved from 2018: https://pdfs.semanticscholar.org/fc54/f00a5e40c647978872bbf98b374892bc4746.pdf
Zhu, K. (2004). Internet-based Distribution of Digital Videos: The Economic Aspects of Digitization on Motion Pictures. Electonic Markets, 11(4), 1-14.
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