Dynamic Pricing

Dynamic pricing is a technique used by businesses and companies when pricing the things in which they sell, such as a product, in relation to the time of year, for example.  What this means is that some companies will change their prices according to the time of year and possibly to the weather as another example. The reasoning as to why they would want to do this is because  the company will want to get the best price possible to charge their customers but at the same time making enough profit and ensuring the demand is high. As a general and basic example of this, would be that if a business were selling umbrellas, the may sell them at a lower cost on a sunny day but then on a day when it's raining, they may change the price dynamically so their customers have to pay a higher price but the business can afford for this to happen as the demand will be high. 


This simple example can be taken and put in to terms with another real world company example like an airplane company such as EasyJet. (http://www.easyjet.com/en/) The reasoning for this is because during the time of year when children of families are in school, such as during term time,  the prices for flights will be cheap because the demand levels for the company will be lower. This is in comparison of when schools have broken up for the holidays which is when the prices increase massively especially because the demand levels have increased also. 


Benefits
If the customer is aware of the dynamic pricing  strategy used by businesses, the customers can benefit from it especially when they know the time in which the prices decrease and become cheaper. This can become massively beneficial for them especially when using the example of finding the right prices for airline flights abroad because holidays can be expensive on their own and even more so when the price for flights have been added into the equation.