Web’s Impact on Pricing: Comparisons, Group Buying & Auctions

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* ACKNOWLEDGEMENT
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* This project on
“WEB’S IMPACT ON PRICING: COMPARISONS,
GROUP BUYING & AUCTIONS”
* prepared by us has been possible due to the help and co-operation of many personalities. *
* We have great pleasure in acknowledging the continuous encouragement and guidance of our respected Professor * Dr. Rajeev Roy
* who has given us an opportunity to realize our effort in the form of this report.

CONTENTS

I.INTRODUCTION2
II.WEB’S IMPACT ON PRICING: COMPARISONS3
III.WEB’S IMPACT ON PRICING: GROUP BUYING6
A.Business Model6
B.Group Buying – The Process6
C.Top Group-Buying sites in the United States7
D.Emergence of Social Commerce in Group Buying9
E.Group Buying in India9
F.Criticism for the Model– Is Group buying a Sustainable Business Proposition?10 IV.WEB’S IMPACT ON PRICING: AUCTIONS11
A.Background11
B.Statistics and Comparison11
C.Conclusion12
V.ANALYSIS OF PRIMARY DATA14
A.Univariate Analysis14
B.Cluster Analysis16
C.Focused Group Discussion17
VI.REFERENCES19
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I. INTRODUCTION
Our entire report will be focusing and analyzing various factors which will help us to understand web’s impact on pricing. Hence the key focus areas for the report are as follows:- * Ability of the consumer to instantly and easily compare the prices offered for a product; and how it affects the pricing of consumer goods. * The reasons that have made online auctions the jugular vein of popular e-commerce sites and the ways in which producers have adapted to and learnt from this phenomenon. * The possibilities that group buying holds for execution of trade and commerce online for the masses, and its effects on the pricing and production landscape as a whole. * We would also conduct a time series analysis to get a bird’s eye view of the changes in pricing, discounts on consumer goods, shopping goods and industrial goods before and after the emergence of online commerce. * As social media has been the buzz word for advertisers and brand managers alike, it’s impact on pricing, demands focus. In this view, the report would touch upon the changes observed in pricing, discounting, and payment mechanisms in the era of Web 2.0. * Auctions: Various types of auctions conducted online and their web hosts. Auction bidding strategies and their online adaptations would be observed. * Group Buying: The effects of group buying on pricing, inventory stocking would be studied. We intend to study the effect of group dynamics on the buying decisions and patterns.

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WEB’S IMPACT ON PRICING: COMPARISONS
1. Companies are inclined towards online application of differential pricing because of the relative ease of applying differential pricing to costumers without them knowing about it. “In September 2000, Amazon.com outraged some customers when its own price discrimination was revealed. One buyer reportedly deleted the cookies on his computer that identified him as a regular Amazon customer. The result? He watched the price of a DVD offered to him for sale drop from $26.24 to $22.74. The company said the difference was the result of a random price test and offered to refund customers who paid the higher prices. And apparently, Amazon had experimented with such random price tests more than once: Consumers also discovered in 2000 that Amazon was using dynamic pricing when customers comparing prices on a "bargain-hunter" Web site discovered that Amazon was randomly offering the Diamond Rio MP3 player for up to $51 less than its usual $233.95 price.”

Differential pricing allows the suppliers to meet customers at different price points. Hence this generates greater sales and revenues.

2. Online auctions have lead to easier and well documented price discovery mechanism. "We will let our customers set prices in the on-line marketplace." -Scott McNealy, CEO von Sun...
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