Pricing in the movie industry

Pricing in the movie industry

In the movie industry, ticket prices are perceived to be the same because the production, distribution, and exhibition of the film are similar. However, due to the continued anti-competitive behavior, movie distributors continue to exert inappropriate control over the pricing policies. The industry is characterized by a situation where by consumers chooses which movie to watch based on individual perception of quality, interest or popularity which hinders competition of the good offered. However, it is different from the case of colleges and universities which adopts a different pricing scheme based on the facts of the various educational courses offered. Institution set the price based on the course complexity concerning the institutional standard offering the service.

Endowment effect

In economics, endowment effect describes a situation whereby a person places a higher value of a good they own just because they own it. This difference in value occurs as a result that an individual possesses the good and feel that they own it through building a personal relationship with it. Since then, they shy off from giving it away at whatever cost. For example, we can consider a situation whereby a family owns a vehicle for some time, and they have been using it for some trips. With time they create a bond or attached to the vehicle and in future if there is a willing buyer, the family might be tempted to place a high value on it, higher than a similar car at the dealer shop. This is because the car has been reliable and has never broken down hence placing a value on it based on the fact that they value its performance more. Selling it proves difficult buyers will be unwilling to pay the inflated price set.

Consumer loyalty and brand loyalty

Consumer loyalty is an attitude and behavior developed by consumers for a given good in favor of one good over another due to the satisfaction of the product, convenience and comfort derived from the product. This encourages consumers to shop more consistently and spend more of their income feeling positive about the service of the product in a competitive environment. In this case, consumers stick to the product irrespective of the market prices charged by the manufacturer.

On the other hand, brand loyalty is feelings developed towards a product with dedication to continuously buy the product over and over again irrespective of competition or changes in the environment. It is demonstrated by a behavior where the consumer buys from the same manufacturer repeatedly. Both loyalties can be explained as a psychological reasoning whereby human beings are attracted to certain goods which match their personality traits such as excitement, sincerity, and competence. Consumer develops beliefs and attitude based on real knowledge, opinion or faith which forms an image in their mind.

In an industry where a firm faces high production costs, there is a tendency to increase market prices to cover the costs and generate revenues. In this case, they try to enhance consumer’s belief drawing them into the brand. For instance, marketers can brand their product as free from sugars which consumers can believe in hence continue purchasing from them although the information might be wrong.


Place this order or similar order and get an amazing discount. USE Discount code “GWEXDDSRGCF10” for 10% discount