Pres:Digital Marketing - Dynamic Pricing

From EcommerceWiki

Digital Marketing - Dynamic Pricing

Digital Marketing - Dynamic Pricing

Title Digital Marketing - Dynamic Pricing
Target group
Topics Dynamic Pricing
Go to slideshow Go to print version

Public summary

The needs of the consumer can only be converted into demand if the consumer has the willingness and capacity to buy the product. That is why pricing is the most important concept in the field of marketing and the most important element of the marketing mix.

In short, dynamic pricing is a pricing strategy which applies variable prices instead of fixed prices.



This is the overall framework of the Digital Marketing couse. We will start with explaining the elements of an online marketing plan. Than we will zoom in on the different marketing aspects based on the customer journey. We start with those online media most suitable to reach consumers and slowly move down the funnel. In the end we discuss customer loyalty which has as goal to re-start the entire process from the beginning.

  • What is price management?
  • What is dynamic pricing?
  • What are the advantages of Dynamic Pricing?
  • What is the dangers of dynamic pricing?
Logo Ecommerce Foundation1.png 3

Price management includes all the activities around the P of price including determining the overall price strategy of the company, determining the price structure of the assortment to managing day to day price changes of individual products.

Logo Ecommerce Foundation1.png 5

  • Cost based pricing
  • Value based pricing
  • Competitive
    • Super premium
    • Premium
    • Average
    • Low
    • Super low
  • Location based
Logo Ecommerce Foundation1.png 6

Choose an industry and determine the price positioning of the main players.

For example for cars:

  • Super premium: Ferrari
  • Premium: Porsche
  • Average: Volkswagen
  • Low: Skoda
  • Super low: Tata
Class Assignment.jpg
Logo Ecommerce Foundation1.png 8

  • Price dumping
  • Price boosting
  • High - low pricing
Logo Ecommerce Foundation1.png 9


explain how in a commodity market prices are determines based on supply and demand.

Prices are no longer set manually but automated based on rules:

  • Local demand & supply
  • Time
  • Weather
  • Competitors
  • Customer behavior
  • Customer attributes
Logo Ecommerce Foundation1.png 12

  • Higher margins
  • Higher sales
  • Increased market share
  • Better utilization
Logo Ecommerce Foundation1.png 17

Price discrimination has been the norm based on:

  • Time: early/last minute travel bookings
  • Region: based on higher or lower operational costs

But for some criteria price discrimination is less obvious:

  • Age: children, senior
  • Occuptation: Students, public servants (police, firemen)
  • Colour: Rich white (fat) tourists
  • Gender: women on dating sites
Logo Ecommerce Foundation1.png 23

  • Offering new customers lower prices than loyal customers
  • Based on behavior: the more interest, the higher the price
  • Based on device: Apple iOS versus Android phones
  • Based on location: high or low income neighborhoods
Logo Ecommerce Foundation1.png 24

  • Create confusion amongst customers
  • Entice customers to change behavior/cheat
  • Lead to price wars
  • Does not match with premium brand
Logo Ecommerce Foundation1.png 26

  • Basics: price management, cost/ value / competitive / location based.
  • Price strategies: dumping, boosting, high / low.
  • Dynamic pricing: local demand/supply, time, weather, customer attributes, behavior.
  • Advantages: higher margin / sales, market share, better utilization.
  • Disadvantages: price discrimation, customer confusion & cheating, price wars.
Logo Ecommerce Foundation1.png 27