Services frequently use differential pricing in an attempt to synchronize supply and demand.Hotels frequented by business travellers often offer discounts for weekend bookings.Cinemas have lower prices for matinee shows.This is a way to contend with which service characteristic?

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Differential pricing is a way to contend with the perishability characteristic of services, which means that services cannot be stored, saved or returned. Therefore, service providers need to find ways to balance the supply and demand in real-time. Differential pricing helps to encourage demand during off-peak times by offering lower prices, and to maximize revenue during peak times by charging higher prices.

Services Frequently Use Differential Pricing in an Attempt to Synchronize