Retail Web System Upgrading with Strategic Customer Using Threshold Policy

This paper mainly deals with the problems that online retailers are facing by some group of strategic customers by upgrading web system and goods pricing. A monopolist price of a product for which stylized dynamic pricing model is considered at the beginning and the price change is done on the product after considering some set of constraints based on the product availability. Due to some network issues sometimes website may get problems at that time there may be a chance of transaction failure for customer during online purchasing. To predict this probability and doing purchasing opinion depending on the belief of Transaction Success Probability (TSP).Considering this there will be a threshold policy for purchasing by customers here it is going to consider it as first one: Customers buy products only if his valuation for products is above threshold (total reduced profit) otherwise they will not take it into consideration. The threshold rises as TSP degrades, or customers turn out to be risk averse. Here we obtain the best cost of each phase and make out the best strategy for online shopping site customizing by threshold and upgrade the system when present TSP is less than threshold. The online trader turns to increase the price if he disregards strategic customer behavior. The value of disregarding strategic customer deeds is significant. The profit loss cost of disregarding strategic customer deeds grows as customer transaction cost rises

State of the art of pricing policy in air transportation: network carriers vs. low-cost airlines

The modern air transport industry is highly competitive. To survive in the market, the implementation of a successful marketing strategy is fundamental. In particular, an effective pricing policy has become crucial for airlines to remain profitable. Correspondingly, the different types of airline in the market have also established very distinct pricing policies. The present study is based on a literature review and presents the state of the art of pricing policy in air transportation. The aim is to compare and discuss the pricing strategies of network carriers and low-cost airlines. Special attention is paid to Revenue Management, which is a very important management tool used by airlines to take advantage of the differences in willingness to pay of passengers. The pricing policy, however, depends on the overall business strategy of the airline. Results show many differences, resulting from the fact that these two types of airline are characterized by very different fundamental business models and, correspondingly, also target groups. Since network carriers and also low-cost airlines have adjusted their pricing strategies lately, these recent developments will be discussed as well. This paper adds to the knowledge of this topic because it presents the most up-to-date and complete study on pricing regarding network carriers vs. low-cost airlines.A moderna indústria do transporte aéreo é altamente competitiva. Para sobreviver no mercado, a implementação de uma estratégia de marketing bem-sucedida é fundamental. Em particular, uma política de preços eficaz tornou-se crucial para as companhias aéreas continuarem lucrativas. Os diferentes tipos de companhias aéreas no mercado também estabeleceram políticas de preços muito distintas. O presente estudo baseia-se numa revisão da literatura e apresenta o estado da arte da política de preços no transporte aéreo. O objetivo é comparar e discutir as estratégias de preços de companhias aéreas de linha e companhias aéreas de baixo custo. Atenção especial é dada à Gestão de Receitas (Revenue Management), que é uma ferramenta de gestão usada pelas companhias aéreas para aproveitar as diferenças na disposição de pagar dos passageiros. A política de preços, no entanto, depende da estratégia geral de negócios da companhia aérea. Os resultados mostram muitas diferenças, resultantes do facto de que esses dois tipos de companhias aéreas são caracterizados por modelos de negócios fundamentais muito diferentes e, correspondentemente, também grupos-alvo. Como as operadoras de rede e também as companhias aéreas de baixo custo ajustaram as suas estratégias de preços ultimamente, esses desenvolvimentos recentes também serão discutidos. Este documento contribui para o conhecimento deste tópico, pois apresenta o estudo mais atualizado e completo sobre preços de companhias aéreas de linha versus companhias aéreas de baixo custo.info:eu-repo/semantics/publishedVersio

A resource-advantage perspective on pricing: shifting the focus from ends to means-end in pricing research?

This paper contributes to a long-lasting debate between practitioners who argue that academia is unable to understand what pricing is all about and academics who criticize practitioner pricing approaches for lacking rigor or rationality. The paper conceptualizes a resource-advantage (R-A) perspective on pricing by drawing on the R-A theory of competition. After a review of R-A theory, the paper integrates the price discretion concept and pricing as a spanning competence by introducing a separation between resources that create and resources that extract value, thereby expanding R-A theory to pricing. The perspective aims to shed light on how the process of competition helps organizations to learn/benefit from pricing capabilities. The research shifts the focus of pricing research from an equilibrium-based static view to a dynamic, disequilibrium-provoking pricing competence. In this way, it draws attention to what is perhaps most relevant to pricing in practice: the actual means necessary to determine price

Co-creative pricing (CCP) : a conceptual development of consumers’ participation in pricing practicing in services

Keskustelu yhteisestä arvonluonnista on saavuttanut yhä laajempaa huomiota niin nykypäivän tieteellisteoreettisessa markkinointikirjallisuudessa kuin käytännössä. Suosiosta huolimatta keskustelusta on jäänyt miltei tyystin huomioimatta arvokäsitteen eräs varsin oleellinen ulottuvuus: hinta. Siitä syystä on ensiarvoisen tärkeää tutkia hinnan merkitys arvokäsitteen, yhdessä tuottamisen ja hinnan muodostamassa suhteiden kolmiossa, sillä vaihdannassa hinta on yksi arvonmuodostuksen tärkeimmistä osatekijöistä. Toissijaisia tutkimusmenetelmiä käyttäen, tämän tutkimuksen tarkoitus on pyrkiä käsitteellistämään yhteinen hinnanluonti arvon lisääjänä. Niinikään tutkimus tarjoaa mallinnuksen niistä vallitsevista olosuhteista, jotka ovat arvon muodostuksessa välttämättömiä. Esitetty malli perustaa juurensa palvelumarkkinoinnin Service-Dominant Logic -ajattelusta, muodostaen fuusion yhdessä ARA-mallin ja markkinointikeskustelussa vallalla olevan elämysmarkkinointiajattelun kanssa. Tutkimus edistää yhteisen arvonluonnin tieteellistä keskustelua syventämällä jo olemassa olevaa tietoa arvon muodostuksesta. Lisäksi, tutkimus edistää käytännön tietämystä esittämällä eksploratiivisen avauksen hinnoittelun dynaamisesta yhteisajattelusta haastamalla markkinoijia ajattelemaan myös hinnoittelua uudesta innovatiivisesta yhteiseen arvonluontiin perustuvasta näkökulmasta. Nykyajan asiakkaat ovat yhä halukkaampia, pystyvämpiä sekä resursseiltaan rikkaampia osallistumaan hinnoittelupäätöksiin kuin aikaisemmin. Yhdessä tuotettu arvo hinnoittelun kautta tarjoaa vaihtoehtoisen ajattelutavan pitkään vallinneelle yritysten sisäänpäin suuntautuneelle hinnoitteluajattelulle ja esittää, että kääntämällä katse asiakkaan suuntaan, saavutetaan todellinen arvo, sellaisena kuin asiakas sen määrittelee. Tutkimuksessa esiin tuotu ajattelutapa tarjoaa uusia mahdollisuuksia vaihtoehtoisille hinnoittelumenetelmille sekä palveluinnovaatioille.Co-creation debate has increasingly become a key topic in the contemporary services marketing theory and practice. Domains of co-creation and value have thus far attracted plenty of academic interest, however, there is an evident deficiency of one essential dimension of value: price. In the triangular relation of co-creation, value and price, it is of high importance to research the role of price, as it is one of the prime components contributing to the formation of value in an exchange. Using secondary research methods, this research works towards a conceptualization of CCP and offers a model of the conditions that need to be in place for value through CCP to occur. The model builds its foundations on Service-Dominant Logic debate. Combined together with the ARA model, and the prevalent thinking of experiential marketing, the work contributes to the academic co-creation literature by adding to the knowledge of value creation. Further, it presents an explorative opening of dynamic pricing thinking for practitioners by challenging the marketers to think their pricing from an innovative co-creation based view. Co-created pricing offers an alternative logic to inwardly focused value creation of the firm and suggests that by turning the focus on the customer, the true value, as perceived by the customer, is captured. Today’s customers are increasingly willing, capable and rich in their resources to participate in pricing decisions, thereby offering an opportunity for alternative pricing methods and service innovations

Is the price right? Pricing for long term profitability

The way how we choose our pricing strategy has a significant impact on company’s success. Nowadays companies more and more adopt a new way of thinking in pricing, namely pricing for a long term period in order to bring higher profitability, to build an efficient pricing strategy. Marketers have only recently begun to focus seriously on effective pricing. These companies are the so called progressive companies. They have begun doing more than just worrying about pricing. To increase profitability many are abandoning traditional reactive pricing procedures in favor of proactive pricing, making explicit corporate decisions to change their focus to growth in top-line sales to growth in profitability. The long-term implications of price strategies are still under-researched, and managers should be aware of shifts in customer reactions that may result from frequent adoption of certain strategies. The company pricing strategy should be seen in relation to developments in the company variables, internal ones (capital strength, competencies, organizational conditions, efficiency of the work force etc.) as well as external ones (customers, competitors, the technological development etc.), adopting strategic pricing. In this paper I will present the most effective pricing strategies leading to long term profitability, and also suggest practical conditions for pricing strategies to maximize profit in the long run.knowledge management, human resources management

The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

Incentives-Based Mechanism for Efficient Demand Response Programs

In this work we investigate the inefficiency of the electricity system with strategic agents. Specifically, we prove that without a proper control the total demand of an inefficient system is at most twice the total demand of the optimal outcome. We propose an incentives scheme that promotes optimal outcomes in the inefficient electricity market. The economic incentives can be seen as an indirect revelation mechanism that allocates resources using a one-dimensional message space per resource to be allocated. The mechanism does not request private information from users and is valid for any concave customer's valuation function. We propose a distributed implementation of the mechanism using population games and evaluate the performance of four popular dynamics methods in terms of the cost to implement the mechanism. We find that the achievement of efficiency in strategic environments might be achieved at a cost, which is dependent on both the users' preferences and the dynamic evolution of the system. Some simulation results illustrate the ideas presented throughout the paper.Comment: 38 pages, 9 figures, submitted to journa