1.3. Pricing Strategies (4/4) - social trends of pricing Flashcards
Strategies to reflect social trends
DAPPS
- Dynamic pricing
- Auction sites
- Personalised pricing
- Price comparison sites
- Subscription pricing
Dynamic pricing
it’s very what
Common where
Changing the price of a product:service to reflect market conditions e.g demand , timing
very flexible
- common amongst travel industries and airlines etc
Pros & Cons of dynamic pricing (2)
maximise pro…
Reflect…
- Can be used to maximise profits e.g if capacity is not full you can lower prices to ensure people buy
- allows pricing to reflect demand e.g in the summer an airline business can increase prices of tickets due to higher demand
Cons
-Reduces customer loyalty - if product price is dynamic you’re encouraging consumers to look for cheaper alternatives
Auction sites
Pros -1
Cons -1
Selling goods to higher bidder e.g Ebay , Amazon
Pros
- Auction sites create urgency as ppl may fear losing out. -> this means customers may pay more than usual or pay ASAP.
Cons
-seller has to pay fee to use some auction sites
Personalised pricing (read blue textbook)
pros - 1
When technology and online databases collect customer information and data which allow businesses to target them with a personal price.
data includes things e.g purchase history & browsing history
Pros
-businesses can charge higher prices to those customers who are prepared to pay more
Subscription pricing
Pros -1
Cons - 1
Involves charging customers monthly fee for use of a service or access to a specific product range
Pros
- customers are tied into long-term agreements with businesses. ->ensures cash flow and removes uncertainty about future sales levels.
Cons
-With some subscriptions customers can cancel
Price comparison sites
Using sites to compare pricing
Why are comparison sites useful for customers?
Customers will be able to compare sites of shops online and choose the cheapest/best possible deals available
