Candid Advice on E-pricing
By: Oluwaseun P. Adeola
The provision of easy access to information about goods and services via the internet boosts the buying power of consumers. One of the significant impacts of e-commerce has been to increasingly reduce the control of business marketers over price. Porter (2001, 66) emphasized the benefits of internet for both buyers and sellers alike when he posited that “The great paradox of the internet is that it’s very benefits- making information widely available; reducing the difficulty of purchasing, marketing, and distribution; allowing buyers and sellers to find and transact business with one another more easily- also makes it more for companies to capture these benefits as profits.” In essence, the internet has made it possible for more businesses to have unprecedented access to customers and that in turn makes it easier for customers to subject companies to unprecedented pressures on pricing. This is because failure to diligently manage the pricing strategy alongside other marketing mix in such a way that provides customers and potential customers with superior values and benefits might result into the company losing its customers. Hut & Speh (2004, 138) argues that businesses that with the ability to sell and price their services on the internet must judiciously reconsider their pricing approach and develop better methods for competing on a price-oriented platform or better still, secure a differential advantages in the mind of customers and potential customers.
The pricing strategy of a company should be coherent and supportive of the overall positioning strategy, marketing strategy and possible pre-emptive considerations. Dann & Dann (2011, 180) advanced that one of the first step in setting prices for e-commerce offerings is to review the company’s economic and environmental plans so as to understand customers’ decision process and the company’s own price-positioning strategy. Second of the steps is to consider the behaviour of the customers or would-be customers in the target market and the competition situations in accordance with the service life circle curve. Third, the company should endeavour to appraise the market research initially carried out so as to further understand customers’ needs, wants and the augmented services features customers seek after
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