Importance of E marketing and Price Transparency Order Instructions: Discussion Questions
1. What is price transparency and why is it an important concept for e-marketers to understand?
2. How does fixed pricing differ from dynamic pricing?
3.Define bundle pricing and explain why/when e-marketers should consider bundle ?pricing.
Importance of E marketing and Price Transparency Sample Answer
E marketing
The concept of e marketing has gained root due to advancement of technology in businesses. Nowadays, businesses use internet as one of their strategies to market their products and services to the customers. The issue of pricing is very important in e marketing. Therefore, the author deliberates on various concepts relating to pricing in e marketing.
Price transparency is one of the important e-marketing concepts that e-marketers need to understand. Price transparency is when all the parties taking part in a transaction- the buyer and the seller know the pricing of the services or the products under sell (Butcher, 2014). It means that the buyer of stocks is aware of the costs of products or services and their quantities. Price transparency is important in e marketing as one of the strategies to attract customers to buy ones products (Soh, Markus & Kim Huat, 2006). Buyers are sensitive to price and they will look out for the products and services that they are able to buy. Therefore, e-marketers should be very sensitive with the prices they provide on the internet platform as it motivates or persuades customers to buy advertised products or services.
Furthermore, price transparency protects both the sellers and the buyers from unfair or questionable prices of the products or services. Buyers can also understand how the prices work and be in a position to access the real value of the products they buy. Therefore, displaying prices avoids instances of unfairness or unnecessary increases of prices at the stores. The customer walks in a store with enough knowledge on the price of the products. Price transparency is also important for e-marketers to be in a position to compete favorable. Customers nowadays compare prices of products and services from various sellers before making decision to buy. For instance, if the prices are available, the customer will be in a position to make decisive decisions on the best location or store to buy particular products. In addition, sellers can compare the prices of their competitors and adopt suitable strategies to counter the competition through other methods such as improving on quality and providing after sale services hence gaining a competitive edge in the market.
Fixed and dynamic pricing are types of pricing that belong to basic pricing strategies commonly used by businesses. The two types of pricing have variations. Fixed pricing is a constant price charged on product and services (Hong, 2012). Therefore, there is no bargaining or negotiations on reduction of the fee regardless of the time or the resources used. Example of fixed pricing is where the government sets prices of certain products such as fuel at certain level and nobody is expected to alter the charges. On the other hand, dynamic pricing also known and time based pricing varies by the season or the time of the day (Şen, 2013). The price is not statistics as there is room for the customer to bargain and negotiate. Example of such pricing is electricity charges whereby it may be charged depending on the hours of the day. Other examples include tourism services that change with seasons among many others.
Bundling pricing is also another important concept of pricing that e-marketers need to understand. This is a concept where products or services are placed in a single package and sold at lower price compared to when such products or services would be sold separately; the more the products, the less the price (Hong, 2012). Bundled price is one of the marketing methods that retailers employ to sell their products in higher supply. E-marketers as well should consider selling their products and services at bundled prices when consumers buy their supplies in large quantities. This is important because, it will attract more customers and the business will be in a position to make more profits as the amount of products that will be sold will be higher. The level of profitability will increase quickly even though the price is low because of the huge number of customers. It also reduces errors and simplifies production.
Importance of E marketing and Price Transparency References list
Butcher, L 2014, ‘Price transparency (its time has come)’, H&HN Hospitals & Health Networks, Vol. 88 no. 6, p. 32.
Hong S 2012, ‘ Smart Pricing Strategies for Services’, SERI Quarterly, Vol. 5 no. 4, pp. 100- 105.
Şen, A 2013, ‘ A comparison of fixed and dynamic pricing policies in revenue management’, In Omega, 41(3):586-597
Soh, C, Markus, M, & Kim Huat G 2006, ‘Electronic marketplaces and price transparency: strategy, information technology, and success’, MIS Quarterly, Vol. 30 no. 3, pp. 705- 723.
