Marketing Strategy Of Personalized Pricing Essay

700 Words Mar 30th, 2016 3 Pages
1. “Personalized pricing” is a one-to-one marketing strategy. With the ubiquitous nature of Internet and the large amount of personalized data that can be extracted from the consumer behavior (clickstream, search query), it is very easy for a seller to personalize a products as per the consumer and also personalize its pricing. Where the traditional sellers fail to attract price-sensitive customers because of the single-price, now same retailers can adjust the price dynamically as per its customers. Thus, seller can differentiate the pricings as per the willingness of the customer to pay. Personalized pricing also helps the estimate the market demand. It is very easy to use promotions on Internet and see how it alters the market demand.
2. Bundling creates “economics of aggregation” for the digital goods. Digital goods have low marginal cost (i.e. fixed cost of production but cheap to reproduce and distribute). These characteristics promote bundling strategy to result in production-side economics of scale and also favor the downstream competition. Effect of bundling on: o Product valuation: With bundling, the seller needs to identify and charge single rate for the bundle to all its consumers. This reduces the diversity in customer valuation as opposed to selling all the products individually, where the content seller needs to identify different consumer segments. o Upstream Market: Bundling plays a major role in the upstream market, where the firms compete for inputs. In…

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