Sunday, September 11, 2005
Car Wash Fundraiser
On my early morning Sunday training ride through Suburbia, USA I noticed an all too familiar sight; nearly every gas station I passed was hosting a charity car wash. No doubt that the greater than ordinary occurances of these events was due to hurricane Katrina. Of the 4 car washes that I remember seeing 3 of them were "charging" $5 per car and the forth was just asking for donations. This variation in pricing strategy leads to the question: IS ONE PRICING STRATEGY MORE EFFECTIVE THAN ANOTHER FOR CHARITY CAR WASHES? I am assuming that each group is trying to maximize the amount of money raised. I am also assuming (for the sake of this question) that the 2 strategies that can be chosen are either a set price strategy or an open price strategy. So what do you think, do you set a price or do you let the customer decide?
My theory (based on price theory and auction theory) is that it doesn't matter; you will earn the same amount regardless of your pricing strategy. It makes sense in my head (quite the scary place) I am just trying to figure out how to explain the concept.
My theory (based on price theory and auction theory) is that it doesn't matter; you will earn the same amount regardless of your pricing strategy. It makes sense in my head (quite the scary place) I am just trying to figure out how to explain the concept.