Dynamic Pricing Strategies and Their Impact on Profit
Dynamic pricing, the practice of setting the prices based on the estimated buyers’ willingness to pay has direct impact on profit. With the advent of technology, especially internet, dynamic pricing has evolved to be one of the most innovative pricing strategies. Marketers are now able to gather wide range of information from their customers ranging from where they live, what they buy to how much they are willing to pay. This information has enabled marketers to adjust their prices to correspond with that the consumer is wiling to pay. Although this practice has become largely effective with the new technology, it is not new in the field of marketing. It is akin to what has long been practiced as price discrimination –where marketers have been charging different prices to different consumers for similar goods.
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