A study into different prices of a single product from different suppliers.
Written in 2004; 1,014 words; 1 sources; MLA; $ 35.95
Paper Summary:
To consider how retailers determine prices, a single product type was compared at three different point-of-purchase locations. The product type was a handheld PDA, with three popular models compared. The three locations chosen were: Amazon, an online retailer; Radioshack, a retail electronics chain; and Churchill's Computers, an independent single-line specialty store. The prices were compared at each store, with this and other information used to determine the rationale each retailer has used in setting prices.
From the Paper:
"Amazon's low prices compared to its competitors suggests that it is using going-rate pricing, which is described as setting prices based largely on following competitors' prices (Kotler, 2002). In this case, Amazon is specifically ensuring it beats the competitor's prices. This strategy is also suggested by the text of the site regarding prices. The site does not include the price but has the text "Price too low to display." The price is then revealed when the item is added to the shopping cart. The site also contains the text "Did you find this item priced lower somewhere else? Let us know." These features suggest a strategy of ensuring that Amazon is offering the lowest price."
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