Marketing Management – Essay Example
Topic: Explain why and how the internet is partially reversing the fixed price concept of retailing? Pricing is a broad term. It is not just the number on a tag or an item. Throughout the course of history, prices have been set via negotiation between the buyers and the sellers. This was followed by the one price concept. Now internet is partially reversing the concept of fixed pricing.
There are different ways in which the companies set prices. In small companies, prices are set by the boss. In large companies, they are handled by the division and product line managers. In even larger companies, top management sets the general pricing objectives, the policies and even decides on the prices set by the lower management. Pricing is a key strategic tool. To effectively design and implement pricing strategies, a thorough understanding consumer pricing psychology is needed.
Internet is changing the paradigm of fixed price concept of retailing today. The concept of one price has been reversed by Internet by giving the customer the liberty to name his price. On Priceline.com, the customer gets to name the price. EBay.com is an online auction company. There are different portal that have come up where buyers conglomerate, combine the orders of many customers and press the suppliers for deeper discounts. Thus internet has reversed the concept of fixed pricing by allowing consumers to take charge of pricing. They can press retailers for lower prices. As a result a market ground with heavy discounts and sales promotions has emerged. (Keller, 2009)
Keller, P. K. (2009). Marketing Managment. Saddle River, NJ: Pearson Prentice Hall.