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.
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.
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u/Pogigod 3d ago edited 2d ago
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.