Price Structures
Various price strucures canbe used to implentment respective relationships staged. Some of the various pricing strategies are
EDLP = Everyday low pricing
-Cost plus
-competive pricing
-demand pricing
-loss leader
-luxury pricing
– frenzied pricing *stub hub, ebay, pricing that is raised by third party vendors what is called a secondary market.
– English auctions, reversed priced en auctions R.F.P, first price sealed-bid auctions, reverse first price sealed-bid auctions, group buying, exchanges
The internet has enhanced dynamic pricing strategies in two ways decreased menu costs and with interactivty.
- As price increases demand will decrease b/c fewer consumers will have the ability to pay. If Marginal costs equals marginal revenue a firm can sell an additional product at the same price and retain a profit.
- A firm would consider fairness when pricing its goods so as to not aggrivate it’scutomers and ruin it’s reputation. The result of a firm practicing price fairness is the sacrifice of short-term profits for long-term realationship with valueable consumers.
- the Internet has enhanced opportunities for dynamic pricing strategies with decreased menu Costs allowing prices to b changed eaisliy and Interactivity which makes it easy for buyers and sellers to interact andnegoicate prices.
- A price discrimination strategy works in three ways to get the sale from different customers. First they try get customers to pay what they are willing to pay in this why they can charge the max that cutomers are willing to pay. 2nd to get max willingness plus additional . 3rd to meet the customers willingness to pay by dividing customers into distint segments, charging different prices to different segments.
