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Characteristics of consumers on the web that influence online pricing…
Characteristics of consumers on the web that influence online pricing
Consumer-Related factors
Brand Loyalty: A customers consistent preference for 1 brand over all others
Time Value: Consumers are less likely to shop around for the lowest prices
Motivation & Ability: To search, process & understand the wealth of info that a web search uncovers
Value associated with customization: The internet & advanced technology has facilitated the development of products & services uniquely tailored to specific customer needs
Product-related Factors:
Commodity versus Differentiated product: Can easily be compared & price sensitivity for these products will be high
Product Attributes: Search, credence & experience qualities
Medium-Related Factors:
Shopping Experience: Consumer enjoyment of a shopping medium increases, the less likely they will be to seek other media
Website Interactivity: Increase consumer involvement as they will engage more with 1 website
Availability of Search tools: Will increase price sensitivity as they reduce the cost of info search
Depth of Info: The more info there is available, the less important price will become
Role of Recommendation agents & Reputation Systems: Act as online feedback mechanisms & increase perceptions of transaction security
Seller side Strategies:
Bundling: Entails the selling of packages of products for 1 price
Versioning: Decreases price sensitivity
Lock-in: Data is used to tailor website offerings & personalize sites so it creates greater consumer intimacy & makes it harder for consumers to switch
Dynamic Pricing: an approach to setting the cost for a product/service that is highly flexible. The goal of dynamic pricing is to allow a company that sells
goods/services over the Internet to adjust prices on the fly in response to market demands.