Online Pricing: Art of Price War

Abstract

Pricing-i.e. price discrimination-is one of the most important elements of the marketing mix, as it is only the element which generates a turnover for the organization. The remaining 3 Ps (Place, Product and Promotion) are the variable cost for the organization. Throughout most of the history, prices were set by negotiation between buyers and sellers', and that remains the dominant model in many economies. But, like many other things, emergence and growth of e-commerce technology has reshaped the pricing landscape. Due to its unique cost structure and characteristics, it is almost impossible for the B2C companies to follow the traditional pricing strategy (cost plus).