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An Implementation Proposal Of Innovative Pricing In Greek Coastal Shipping

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  • Ioannis Sitzimis

    (Department of business administration & Tourism, Hellenic Mediterranean University, Heraklion, Greece)

Abstract

Greek coastal shipping is an industry which passed from the state regulatory interference to market forces. Its fare structure (tariff) was based on average (or total) cost and distance was the representative cost variable. As it is an industry facing strong economies of scale, average cost is higher than marginal cost. This means that companies equalizing prices to marginal cost, following Pareto–efficient allocation of resources, are driven to losses and are forced to seek other methods of efficient pricing policy. The purpose of this article is to examine the implementation of “innovative†pricing in Greek coastal shipping. “Innovative†pricing contains applicable measures in order to increase ticket prices in “peak†periods without affecting the level of quality, the number of passengers and the market share. The analysis results show that average fare will not necessarily raise. Ticket increases may be accompanied by quantitative discounts in periods of low demand. In these cases, “season tickets†can be applied.

Suggested Citation

  • Ioannis Sitzimis, 2021. "An Implementation Proposal Of Innovative Pricing In Greek Coastal Shipping," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 6(2), pages 69-77, September.
    • Handle: RePEc:ora:jrojbe:v:6:y:2021:i:2:p:69-77
    DOI: http://doi.org/10.47535/1991ojbe130
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    References listed on IDEAS

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    1. Proost, Stef & Van Dender, Kurt, 2004. "7. Marginal Social Cost Pricing For All Transport Modes And The Effects Of Modal Budget Constraints," Research in Transportation Economics, Elsevier, vol. 9(1), pages 159-177, January.
    2. Alexander M. Goulielmos & Giannis Sitzimis, 2012. "Measuring Market Concentration in the Aegean Ferry System," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 62(1-2), pages 7-27, January -.
    3. Ioannis Sitzimis, 2021. "An Optimal Forecasting Method of Passenger Traffic in Greek Coastal Shipping," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 14(3), pages 72-87, December.
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    1. Ioannis Sitzimis, 2021. "An Optimal Forecasting Method of Passenger Traffic in Greek Coastal Shipping," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 14(3), pages 72-87, December.

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    More about this item

    Keywords

    Greek coastal shipping; peak periods; economies of scale; innovative pricing; season tickets;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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