This pricing strategy

This pricing model and its effects on the service industry

This pricing model had a variety of effects on the service industry. For example, noting that prices differed between devices, browsers, or between buyers would lead consumers to believe that the company was unjust or that its pricing approach was unethical. Consumers anticipate paying a comparable price for comparable goods or services (Furtwengler, 2010). If this does not happen, they may change their allegiance to other companies. When consumers do not understand why they see price disparities for similar items, they may believe the firm is unethical, negatively harming its reputation. This pricing strategy can adversely impact e-service quality because it may make consumers view the company as a sham. According to Duffie (2012), e-service quality is the extent to which a website can facilitate efficient and effective shopping, purchasing, and delivery. If the website portrays price discrepancies, buyers may view it as fake.

Retailers using the pricing strategy

Retailers can also use the same pricing strategy for products because the costs of some types of items adjusted based on different factors that define consumer’s ability to purchase at a particular price (Eddie et al., 2012). For example, Amazon can use this strategy to change prices based on geographical location, the type of device used, and the frequency in which a consumer views a product.

Disadvantages of customized pricing

I do not agree on customized pricing because it can negatively impact buying decision especially for consumers who do not understand why prices for similar products or services may vary from one person to the other. This pricing strategy can also hurt an organization especially when consumers feel it is unethical to offer similar packages at different prices.

Other industries using personalized pricing

Other industries that are using personalized pricing comprise of the construction industry, where prices are charged based on several factors like the quality of materials that one purchases and the value of existing structures. The retail industry also uses this pricing strategy to determine prices based on dress code, the type of products which consumers show interest in, and so forth.

References

Duffie, D. (2012). Dark Markets: Asset Pricing and Information Transmission in over-the-Counter Markets. Princeton, NJ: Princeton University Press.

Furtwengler, D. (2010). Pricing for Profit: How to Command Higher Prices for Your Products and Services. New York: American Management Association.

Eddie, Hui., Wong, C., Joy, T.Y & Wong, K.T. (2012). Marketing Time and Pricing Strategies. The Journal of Real Estate Research, 34(3), 125-135.