Marketing in a digital world (5) pricing

在數位時代，價格在網路上的透明度很高，如何有效定價，需要不同的工具。本課程的主題是 price comparison tools, pay waht you want (PWYW)
Book: the strategy and tactics of pricing by Thomas Negal

PART1: pay what you want (PWYW)
discount price examples:
movie theatre "price segmentation" for students or demographic citizens
discount price for two-day-ago's  donut

PWYW examples:(user decide the price to pay and track the price on digital platform)
Louis CK, humblebundle.com sells digital products and donate to charity.
handset.com, PWYW and attract customer loyalty.
radiohead, new album sold as fans would pay

deep dive:
1. customers may pay lower. but honesty and fairness will drive them pay transparently.
2.how can firms make money? Radiohead and baltimore aquarium. may get more pays or more users to attend.
3.Is the strategy sustainable? selected buyers, selected items and limited duration are three basement.

Academic study:
KIM (2009)
some cases, it may be profitable.
customers will pay by 15% lower than reference price
it may increase 10% of sold volume than normal

Schons(2013)
price declined over time.
profitable for first time customers.

Recommendations:
1.set a reference price. for example PWYW for Vitamin C, but display the listed price of Vitamin D
2.focus on marginal cost. sell the zero marginal cost product(digital things) for PWYW
3. tray a limited rollout: headset.com only sell PWYW for two models over 200 other models.
4.use charity appeals: appeal customers to pay more for charity

PART2: price comparison tools
especially for furnitures, cars and appliance
customers may compare price among physical stores, webstes

free Tools:
1.google shopping (25 countries, by search)
2.pricebaba (by category)
3. redlaser (in store price using barcode)

deep dive:
what features do these tools offer? information
how do they work? free to use, advertiser or vendors pay. easy use, different source.
do these tools really save customers money? really lower price, none is perfect, users should exercise.

academic study:
Lynch/ariely (2000)
60 wines in two resellers websites,
40 different, 20 in common,
but buyers will focus more on price than features

serenko (2010)
compare 16 tools:
results in price lower but with errors in every tool.

Recommendations: how firms set pricing strategy by tools
1. make comparison difficult, change in the bundle and contents.
2. match competitor's price,
3. if you can't beat them, join them.
4. be unique. especially experience. Dubai mall, bookstore, drugstore