during the week. He knows, based on studies that he has 10.1 Affiliated Parking Systems Looks to New sioned, that demand

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During The Week He Knows Based On Studies That He Has 10 1 Affiliated Parking Systems Looks To New Sioned That Demand 1 (604.87 KiB) Viewed 51 times

during the week. He knows, based on studies that he has 10.1 Affiliated Parking Systems Looks to New sioned, that demand during certain parts of the day is relatine lastic (increase prices and increase total revenues) while and Pricing Approach night and on weekends is much more elastic (decrease prices Bill Wright is the Chief Marketing Officer (CMO) for Affiliated Parking increase revenue). Note that this is a business with very het Systems (APS). It's an old school business that has been around, costs around the ownership and maintenance of the properties in some form, since humans started using other forms of transpor a small variable cost. Many lots have no attendant and use some tation besides their own feet.APS is a family owned business that form of electronic or manual system to collect parking fees. Some has been in business for over 80 years. APS owns and operates over have a single or limited number of attendants to collect fees 300 parking lots with slightly over 33,000 parking places, primarily His research has led him to focus on two things. First, bes in major urban areas with over two-thirds of their lots in the top interested in doing all fee collection from totally electronically 10 Metropolitan areas of the United States. Bill has been working for the company for almost 20 years, starting right out of college to further reduce variable costs. Second, he wants to vary pricing It is certainly not a glamorous business, but it has been a good based on the level of demand for parking in real time. In his estad one for APS. Bill has been struggling searching for new ideas to on surge pricing, he has discovered the literature on artificial intel increase revenues from existing lots. They have run out of opportuni- ligence. This is something new to him. He has certainly read about ties for growth through acquisition, a major engine of growth for the it from a high level in the media and has seen how it is portrayed company for decades, having acquired many of the best locations in science fiction films, but it is not something that he studied in the country. In addition, Bill has been studying various trends in school or has had exposure to in his business career. He has.com the country and sees some developments that are negative for the the conclusion that he is going to have to use some type of ac future of the parking lot industry in general and APS in particular. intelligence system to drive the kind of automated dynamic pricing • Trends in car ownership are headed downward which is system that he is envisioning for the company. already evidenced to a small degree. In particular, younger 1. Would you say that Bill is on the right track regarding the people , based on environmental concerns, lifestyle issues, need for artificial intelligence to implement dynamic pro more interest in living closer to work rather than in suburbia, ing? Why do you say that? comfort with ride hailing services like Uber and Lyft, are less interested in car ownership than their parents. 2. If he were to pursue the idea further ſhe obviously would • Increases in people working from home, virtual offices, working need help from a consulting firm), what data would be online in general, are not positive for the future of the industry, needed to implement surge or dynamic pricing? Bill has been reading about surge or dynamic pricing where 3. Would models be needed? What would the models door pricing for a product or service is based on the level of demand for that product or service in real time. He has researched the concept, 4. Describe the ultimate system that would be needed in talked to people who are using it and seeing how it is being used to price express lane usage on freeways (why do we park on a driveway of inputs needed, how those inputs would be captured and drive on a parkway)? He is wondering whether this approach to models needed (just a general sense of what the mood would need to do), how pricing would be commune pricing would help APS increase revenues and profits. Historically the industry has charged a price per hour or day, perspective users and how fees would be collected as possibly varying the level by weekday, weekend and dayparts it all out in a diagram with a few comments on what our ring at each step is probably a good approach to any might they be developed? this question.