University essay from Blekinge Tekniska Högskola/Sektionen för Management (MAM)

Abstract: Successful setting of prices is one of the most crucial challenges faced by companies. Electronic commerce (EC) have come a long way to see how companies manage their pricing issues, to attract consumers and satisfy their desires in terms of purchases and re – purchases online. Different companies adopt different methods of allocating or presenting prices of product on line, this to a very large extent give’s an entrant to, most- successful, successful, close to successful and failed companies. Due this fact , this research work see the need to critically analyze flexible pricing mechanism that could influence consumers to purchase and thus create a bond between companies and consumers. So many researchers has carried out researches that is closely related to this fact. For example “ ( Mark Behrsin et al. 1994)” who explained that in today’s thinking, consumers are in the driving seat of companies, explaining, they are the arbiter of success and if they do not value the company and their product then they are in real trouble. So, for a company to excel outwardly there is need to attract consumers to patronize/purchase product and thus, have an after- effect of maximum satisfaction. One of the basic thing that give attraction is price, though other factors are involved, like services, quality, brand , e.t.c which in most cases, are fixed factors that enhances what determines price and can be insignificant. Informatively, the idea behind presenting these prices in a flexible manner enhances consumer’s attention and willingness to carry out purchases on line. This thesis work is going to evaluate the flexible pricing mechanism and how they influence consumer’s decision to purchase on the internet compare to stable prices adopted by physical stores. According to “(Carl Shapiro et al. 1999)”; there are lots of price flexibility when information of products are sold, and are highly tuned to customers interests on line. In this sense, information of product are sold to consumers through so many ways, which are; personalization/customization, auctions, sales, promotions and so on. These flexible pricing mechanisms are going to be critically examined with past literatures that are of related relevance to this subject area. Thus, for critical evaluation, flexible pricing practiced by companies on the internet will be compared with stable prices, then what consumers see as best option will be deduced as part of the conceptual development of this research work. Hence, this research work is one of the studies carried out strictly with an explorative research methodology which is an aspect of qualitative methodology, and is adopted for the better understanding of the research area.

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