Heisan67 From , joined Dec 1969, posts, RR: Posted (13 years 10 months 1 week 5 days 23 hours ago) and read 1979 times:
IF SAS SOLD PAINT IN NORWAY
First a reprise of how ordinary hardware stores sell
Customer: Hi. How much is your paint?
Clerk: We have regular quality paint for NKR18 a litre
and premium paint for
NKR25. How many litres would you like?
Customer: Five litres of regular paint please.
Clerk: Great. That will be 400kr inkl moms
Now, imagine you are buying paint from SAS. First
you try reaching them
by phone to ask if they have paint. All you get is
music on hold, so you
drive to the nearest SAS store.
Customer: Hi. How much is your paint?
Clerk: Well, sir, that all depends on quite a lot of
Customer: Can you give me a guess? Is there an
Clerk: Our lowest price is NKR12 a litre, and we have
60 different prices up
to NKR200 a litre.
Customer: What's the difference in the paint?
Clerk: Oh, there isn't any difference; it's all the
Customer: Well, then I'd like some of that NKR12
Clerk: When do you intend to use the paint?
Customer: I want to paint tomorrow. It's my day off.
Clerk: Sir, the paint for tomorrow is the NKR200
Customer: When would I have to paint to get the NKR12
Clerk: You would have to start very late at night in
about 3 weeks. But you
will have to agree to start painting before Friday
of that week and
painting until at least Sunday.
Customer: You've got to be kidding!
Clerk: I'll check and see if we have any paint
Customer: You have shelves FULL of paint! I can see
Clerk: But it doesn't mean that we have paint
available. We sell only a
certain number of litres on any given weekend. Oh,
and by the way, the
per litre just went to NKR16. We don't have any more
Customer: The price went up as we were talking?
Clerk: Yes, sir. We change the prices and rules
hundreds of times a day and
since you haven't actually walked out of the store
with your paint yet, we
just decided to change. I suggest you purchase your
paint as soon as
possible. How many litres do you want?
Customer: Well, maybe five litres. Make that six, so
I'll have enough.
Clerk: Oh no, sir, you can't do that. If you buy
paint and don't use it,
there are penalties and possible confiscation of the
paint you already
Clerk: We can sell enough paint to do your kitchen,
bathroom, hall and
bedroom, but if you stop painting before you do the
bedroom, you will lose
your remaining litres of paint.
Customer: What does it matter whether I use all the
paint? I already paid
you for it!
Clerk: We make plans based upon the idea that all
our paint is used, every
drop. If you don't, it causes us all sorts of
Customer: This is crazy!! I suppose something
terrible happens if I don't
keep painting until after Saturday night!
Clerk: Oh yes! Every litre you bought automatically
becomes the NKR200 paint.
Customer: But what are all these "Paint on sale from
NKR10 a litre" signs?
Clerk: Well, that's for our budget paint. It only
comes in half-litres. One
NKR5 half-litre will do half a room. The second
half-litre to complete the
room is NKR20. None of the cans have labels, some are
empty and there are no
refunds, even on the empty cans.
Customer: To hell with this! I'll buy what I need
Clerk: I don't think so, sir. You may be able to buy
paint for your
and bedrooms, and your kitchen and dining room from
someone else, but you
won't be able to paint your connecting hall and
stairway from anyone but
And I should point out sir, that if you paint in
only one direction, it
be NKR300 a litre.
Customer: I thought your most expensive paint was
Clerk: That's if you paint around the room to the
point at which you
started. A hallway is different.
Customer: And if I buy NKR200 paint for the hall, but
only paint in one
direction, you'll confiscate the remaining paint.
Clerk: No, we'll charge you an extra use fee plus
the difference on your
next litre of paint. But I believe you're getting it
Customer: You're insane!
Clerk: But we're now THIS COUNTRY'S only paint
supplier! And don't go
looking for bargains! Thanks for painting with
LN-MOW From United States of America, joined Jan 2000, 1916 posts, RR: 12
Reply 5, posted (13 years 10 months 1 week 5 days 18 hours ago) and read 1800 times:
We can laugh, but if it hadn't been for revenue management we wouldn't GET the good deals we do today.
Sometimes you will see strange side effects, but in principle it works to our benefit. 'Us' being the leisure traveller ..
Justplanesmart From United States of America, joined Mar 2001, 730 posts, RR: 2
Reply 6, posted (13 years 10 months 1 week 5 days 3 hours ago) and read 1734 times:
One important difference between paint and a seat on a flight. If nobody buys the paint today, it is still on the shelf to be purchased at a later time. Its revenue potential is still the same. If nobody buys a particular seat on a certain flight, once the plane departs, it is gone! Revenue realised=0. So yes, airlines have to use different rates and rules to try to maximize the revenue that can be achieved on that flight. The rest is Economics 101 (which I never took).