We need to set price when we have:
a new product, or
when we enter a new market with an existing product.
Need to decide what position you want your product to be in
assumes that competitors will not react to how a firm prices its products
assumes that competitors will react to changes in prices of a firm’s products
Static is very unrealistic.
The Internet had influenced dynamic pricing in two ways:
Decreased menu costs - cost to change the price
Interactivity - ease of Internet interaction