Pricing is an art as much as it is a science: ‘‘It depends as much on good judgment as on precise calculation’’ (Nagle and Holden, 1995, p. 9).

Nagle and Holden (1995) contend that a more profitable approach to pricing is value-based pricing. With value-based pricing, the pricing approach is reversed from cost-based pricing. Rather than starting with a product and then determining what price should be charged for the product, value-based pricing is initiated before investments are made. Products are designed and produced in an effort to meet a cost performance target that is demanded by customers. Through this approach, consumers are provided with value. The role of the sales and marketing organization is then to ‘‘raise the customer’s willingness to pay a price that reflects the product’s true value’’ as opposed to merely processing orders at whatever price the consumer is willing to pay (Nagle and Holden, 1995, p. 8). Through a value-based strategy, a firm attempts to ‘‘maximize the difference between the value created for the customer and the cost incurred by the company’’ and the role of pricing is to ensure that the firm realizes an equitable reward, in the form of earnings, in exchange for creating value for their customers at minimal cost (Nagle and Holden, 1995, p. 8). An example of the successful implementation of a value-based pricing strategy in the hotel industry is Marriott’s development of the Courtyard mid-priced hotel product, which was a ‘‘textbook case of product planning. When /the small-sized, medium-priced, high-style Courtyard by Marriott was finally unveiled in 1983, it really flew’’ (Marriott and Brown, 1997, p. 94).

A challenge that is often faced when attempting to apply a value-based pricing strategy relates to the willingness and ability for different groups of consumers to pay different price levels for a given product. One of the methods by which marketers overcome this challenge is by establishing segmented prices (Nagle and Holden, 1995, p. 210). Two approaches to price segmentation are by buyer identification and by time of purchase. The latter is known as peak-load pricing and is effective when demand for the product varies by time period and the product is not able to be stored, as with airline seats (Nagle and Holden, 1995, p. 215)

Hotel demand is stronger on weekdays versus weekends, particularly for business-oriented properties that comprise the majority of hotels for large hospitality enterprises (and that also forms the basis for this analysis). This assumption commonly appears in the hotel literature (Jeffrey and Barden, 2000; Choi and Kimes, 2002) and has been validated by several empirical studies. For example, Rushmore (2000) empirically observed that transient demand is weaker on weekends and Jeffrey et al (2002) found that business customer occupancy was higher on weekdays using 15 years of hotel data from England. Many hotels and industry experts believe this assumption to be true, as seen by the fact that some hotels promote weekend products to compensate for the perceived ‘weak’ or ‘soft’ weekend demand:

W. Marriott Jr, CEO, Marriott International Inc. (as cited in Ruggles, 2008): ‘The Company (Marriott) continues to see weak weekend leisure demand and is beginning to see softer mid-week demand.’

Jonathan Langston, Managing Director, TRI Hospitality Consulting (as cited in Strauss, 2007): ‘They (London, Paris, Amsterdam hotels) balance strong weekday demand from business with weekend tourist traffic.’

Hotels Magazine (2007): ‘Sage is partnering with established brands like Sheraton, Marriott, Best Western and Holiday Inn, with the goal of opening about 20 parks in the United States by 2008. It is focusing on suburban and semi-urban locations that have steady weekday business travel but soft weekend sales.’

MARRIOTT POOLTourist who would like to experience number one hotel service at reasonable price may stay in JW.Marriott Jakarta on week end.

The implementation of week end price strategy by JW Marriott can be seen below:


November 28 – December 3, 2015

Price 1.585.000 1.585.000 1.585.000 2.212.000 2.212.000 2.212.000 2.212.000