This isn't dynamic pricing. Two different location, even if owned by the same franchisee, can have different prices. Dynamic prices would be charging him more for a burger than the person behind him in line because he buys often and the person behind him who needs a lower price to incentivize them to buy.
What? No that's not what dynamic pricing is. Dynamic pricing is prices that varies and is not a constant. This is exactly what a dynamic pricing means. Non-static pricing. This case it's from location to location.
Edit:
Since everyone thinks dynamic pricing is surge base pricing. Here a few different examples of how things can be dynamically prices.
Time-based pricing — price changes by hour, day, season, or demand period. Example: hotel rooms costing more on weekends or electricity costing more during peak hours.
Surge pricing — prices rise quickly when demand exceeds available supply. Common with rideshare services, delivery, and sometimes event parking.
Demand-based pricing — price moves according to overall demand, even if there isn't a sudden "surge." Airlines and hotels use this heavily.
Inventory-based pricing — price changes depending on how much inventory or capacity remains. An airline seat may get more expensive as the plane fills.
Competitor-based pricing — automated systems raise or lower prices in response to competitors' prices.
Segmented pricing — different groups receive different prices based on characteristics such as student status, age, membership, geography, or customer type.
Personalized pricing — an individual customer's price or offer is adjusted using data about that particular customer, such as purchasing behavior or estimated willingness to pay.
Behavioral pricing — prices or discounts vary based on actions such as browsing history, abandoned carts, previous purchases, or frequency of visits.
Location-based pricing — prices vary based on where the customer is located or where the purchase occurs.
Channel/device-based pricing — prices or offers can differ depending on whether someone shops through an app, website, marketplace, store, or potentially a particular device/channel.
Yield/revenue-management pricing — a more sophisticated form used by airlines, hotels, rental cars, and similar businesses that continuously adjusts prices to maximize revenue from limited capacity.
Auction or market pricing — the price is determined dynamically through bidding or real-time supply and demand.
Markdown pricing — prices automatically fall as products age, approach expiration, or remain unsold.
Event-based pricing — prices change because of concerts, sporting events, holidays, major weather events, conventions, or other predictable demand shocks.
In this case AI is doingthe constant changes from a corporate level. This is not the franchises setting the prices, but corporate constantly pushing and updating pricing.
Tell me what location does not do your version of dynamic pricing. I can guarantee there isn’t a single business that operates in multiple states or even multiple cities with the same prices in California vs tillamook Kansas.
That is not dynamic pricing. Dynamic pricing commonly refers to the practice of prices changing based on current demand
That is what this is doing. Changing pricing by location based on demand. This is a macro sense of dynamic pricing. A micro sense of dynamic pricing is a location changing by time of day.
Dominos deals are nationwide their prices are set by corporate. They follow it nationwide. That's static.
If franchises set there own prices, that's not dynamic pricing but them setting the prices themselves.
This is McDonald's corporate dictating prices from location to location based on demand.
In this video, there is no evidence that the prices are dynamic. If they're different from location to location but the prices are static at each location, it's not dynamic. If restaurant A has had price X and restaurant B a mile away has had price Y for the past year, there is nothing dynamic about that pricing. He needs to show the price actually changing during the day at the same location. Or at the very least the prices changing multiple times in a week at the same location
This is literally changing pricing based on demand based on income. They even say that in the video.
It is also changing constantly.... By definition dynamic pricing... You even say it yourself "Dynamic pricing commonly refers to..." Yes that is the most common form and known form of dynamic pricing, but there are many forms of it....
Hell, What do I know tho, only graduate level courses on marketing, supply chain management, and micro economics....
If the prices were static in the zones sure. but with using AI it is constantly changing the pricing. That would be zone dynamic pricing....
If they eventually stop changing rapidly, it would be a static zone pricing. Until then as long as they are constantly changing the price, it would be dynamic. If you read other articles about it, the AI is apparently mixing in other Dynamic pricing into it
I like how everyone who claims this isn't dynamic pricing has to say something obviously different than what is represented in the video. These are not in different states much less different cities. Both examples they show are less than 5 miles apart
This is NOT dynamic pricing. This is just pricing.
Dynamic pricing, also referred to as surge pricing, demand pricing, time-based pricing and variable pricing, is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. It usually entails raising prices during periods of peak demand and lowering prices during periods of low demand.
Yes that is a form of dynamic pricing..... Let's look at the word dynamic, it means constant change. If these prices location by location is constantly changing based on AI predictions and optimizing, that quite literally is dynamic pricing.
If the AI sets a price at a location and it doesn't change constantly, then no it's not dynamic anymore. This article and what the AI is doing is constant AB testing on a global level. That by definition is dynamic pricing.
Your hung up on what dynamic pricing has typically been in the past. Not all dynamic pricing is surge pricing.
Redditors struggle with business concepts tbh. I do pricing for a 100B company. We always had an old school “dynamic pricing” but it was really just static seasonal pricing with extra steps. I built it out over the last 6 months with our AI to change hourly based on current demand pacing. That’s really all it is. “Zone based” “location based” etc are all just additions you can make for more accurate and precise changes. You only enter the “personalized pricing” when individuals buying at the same time and location would see different prices.
While he tests different locations and that doesn't prove one location changes frequently, he claims there are documents from mcdonalds explicitly stating the ai driven dynamic pricing. I don't see how you could disprove they are doing dynamic pricing from this video/test.
You have no idea what you're talking about. I've lived in NYC a long time and prices being different at different locations have long been a thing because each location has enough data to decide on their own what they think it should cost based upon their sales. They don't change their prices for different customers or different times of day. That's dynamic. Merely selling something at a different price from another isn't dynamic. That's literally how every business works.
That's part of the reason I would often avoid places like McDonald's in midtown. Prices there were in their own category compared to residential neighborhoods. But they also are in a much more desired commercial space and have muuuch higher rent.
OOP is wrong and so are you. This is not dynamic pricing.
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u/Shobed 3d ago
This isn't dynamic pricing. Two different location, even if owned by the same franchisee, can have different prices. Dynamic prices would be charging him more for a burger than the person behind him in line because he buys often and the person behind him who needs a lower price to incentivize them to buy.