Pricing and e-commerce - Pricing

Pricing and e-commerce

Modern economy is characterized by a high degree of influence on it technological component, which is manifested in the willing use for economic purposes of various technical instruments (radio, television, telephone and many others). Over the past decade, the computer with the infrastructure surrounding it is becoming increasingly active in this list. The rapid development of communication technologies makes the issue of the implementation of economic activity using the Internet very relevant. The availability and current state of the Internet offer business, on the one hand, a number of uncertainties, but on the other - huge potential opportunities. The Internet can change the way companies communicate with their customers. It provides much more opportunities for creating brands, introducing innovations, pricing, commerce and marketing. It forces everyone who uses it to think about time and distance in a new way and discovers new markets and distribution channels. Thus, it is obvious that the Internet economy, which includes a number of components (Internet marketing, Internet commerce, Internet banking, etc.), operates on principles that are very different from those typical of the traditional economy.

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The principle of completeness. In the Internet economy, the value of a product (service) is due to both supply redundancy and ubiquity (scale) of its spread. In other words, the more goods on the network, the more valuable it becomes due to its greater availability to potential consumers.

The principle of increasing effect. The arrival of new participants in the Internet economy leads to an increase in the size of the network itself. As a result, more and more resources are being drawn into it. As a result, sales are increasing, which leads to increased profits. In addition, a reduction in production costs, typical for the Internet economy, leads to an increase in the profit not only of individual players, but also of all participants in the process.

The principle of reverse pricing. The prices of the best goods in the Internet economy tend to decrease due to the influence of the time factor: the longer the purchase is deferred, the lower the price of the purchased product. Therefore, Internet companies are forced to supply more and more new products to the market in order to survive in acute competition. Such a system of reverse pricing extends mainly to microprocessors, telecommunications and other high-tech products.

The principle of free-of-charge. According to the principles of completeness and reverse pricing, the most valuable products must be transferred to interested consumers for free. For example, Microsoft gives the Internet browser Internet Explorer free of charge to the Internet users, free e-mail service is provided, there are known cases of free distribution of antivirus programs, etc., but the sale of subsequently modified versions of these products will bring significant revenue to companies.

The principle of revaluation of values. It consists in the gradual replacement of material values ​​with the knowledge system and information values, considering that the share of the information component in the value of products is constantly increasing. Awareness of this leads to an increase in the value of a clear segmentation of the market, based on a detailed analysis of all aspects of demand and consumer demand.

The principle of globalization. Since the Internet economy is a set of closely related markets on a global scale, then any business can spread at high speeds around the world, but at the same time it will grow at the same speed and the number of competitors, which is associated with the growth of various kinds of risks.

The above basic principles of the functioning of the Internet economy help to come to the conclusion that it is possible to distinguish a number of differences between traditional business and business using computer technologies. In turn, they will be reflected in such practical aspects as information gathering and analysis, development of an algorithm for searching potential customers, partners and investors and, of course, pricing issues, the correct solution of which is the key to business efficiency. In these conditions, it seems quite natural to ask whether it is worthwhile to introduce the new term "Internet pricing". In fact, the presence of a number of features of electronic commerce implies, at a minimum, price adjustment compared to offline trading and, as a maximum, the emergence of new approaches to issues of pricing for goods and services realized through the worldwide network. The distinctive features of electronic commerce and the usual trading process can be classified as follows.

1. By the ways attracting customers. The ways to attract buyers to the store are very important. In trade, in its traditional sense, this process can be characterized by four stages:

• attracting a buyer through advertising; here the main factor - the place where the store is located;

• the impact on the buyer of a good appearance of the storefront and the entrance to the store; this stage is assigned an important role;

• Attraction of the buyer who has already entered the store, the internal design of the trading floor and its convenient organization;

• the buyer chooses the goods he needs; from how quickly and easily he will choose a product with the help of a seller in the sales area, the decision of the buyer will depend on whether to make the following purchases in this store.

In the electronic store all the above stages of attracting the buyer are organized in a completely different way. The electronic showcase and the entrance to the store are combined together. All advertising information is placed on the storefront. Such information should be presented in a short and understandable form for the buyer, from which he must understand: what, how and where can he acquire. Price information here is not the last role, as the desire to purchase the desired product at a lower price is one of the main reasons for contacting online stores.

2. By means psychological impact on buyers. Sellers are deprived of the opportunity to exert psychological influence on buyers in the electronic trading system. This excludes the possibility, for example, of such an impact on the buyer, as a demonstration of his charm and respectability. All this remains behind the screen of the web browser.

3. By the ways submission of information about the product. In the usual shopping process, acquaintance with the goods occurs in person. In the electronic store, such acquaintance occurs by careful study by the buyer of the information description and the corresponding characteristics of the product.

4. By the ways purchases. In an e-store when buying goods, the buyer passes registration and ordering through the Internet. Thus, there is a certain percentage of the risk, which is that the buyer as a result may not receive the goods that he ordered, or the quality that he expected. As a possible compensation for this, albeit small, risk can be a more attractive (in terms of the buyer - a lower) price of goods sold through the worldwide network.

5. Expenses for organizing trade. The organization of trade and services through an online store makes the availability of store buildings, warehouses and offices, as well as all kinds of trading equipment optional. There are many trading companies in the world that sell products only through electronic stores and do not have any salesrooms at all. The organization of trade in this case allows to reduce expenses for sale, advertising and the maintenance of a retail network. Naturally, reducing costs, which serve as one of the basic structural elements of the price of any product or service, entails a price reduction. That is why it is believed that in fact the products can be sold "at retail, but at wholesale prices"; (ie 20-30% cheaper than in traditional trade).

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7. By degree of availability. Any electronic stores are available to the buyer from virtually anywhere in the world. Therefore, he is not limited in the choice of goods and services necessary for him during travel and business trips. Such stores are open around the clock, they do not have a lot of buyers, as in ordinary stores. The buyer has the opportunity to make purchases at any time convenient for him.

8. By quality of service. In an ordinary store, when buying and for obtaining more complete information about the product, you need to contact the seller for advice. The choice of the product will depend on the seller and the level of his competence, as well as on the time that the seller will be able to pay to the buyer. A well-organized e-store offers a wide range of information support for all products, and the buyer does not need to wait until the seller becomes free to consult about the goods. This state of affairs can cause the buyer to give preference to the electronic store, which can be regarded as a decrease in the price sensitivity of the buyer.

9. time to market. To create your own branded electronic store will take much less time than organizing a traditional store. At the same time, the manufacturer can establish and control the prices of its products. Trading without intermediaries, she immediately receives revenue directly from the sales of their goods.

10. According to the range of products. In a traditional store, as a rule, the choice of goods is limited, so the buyer often has to circumvent one such store in search of the right product. If there is no goods necessary to the buyer in one electronic store, then it can be purchased in another. You can also directly make a request to the website of the manufacturer. Therefore, you can always choose the really best product or product at the most reasonable price.

Thus, today the development and improvement of the theory, methodology and practice of pricing in the Internet as one of the most important elements of managing the marketing activities of companies is becoming more urgent, as evidenced by the following information (Table 14.1)

Table 14.1

The impact of a 1% change in key parameters on profits

Option

Degree of influence on profit,%

Price

11.19

Variable Costs

7.8

Sales volume

3.3

Constant Costs

2.3

We can not dispute the need for a comprehensive solution of issues related to the justification and adoption of management decisions in the field of pricing of goods and services sold through electronic commerce. In this connection, the price of the goods (services) realized via the Internet can obviously be represented as a function of a number of parameters that determine it, that is,

where - the price of the product; - a vector of quality characteristics of the product; - the cost of producing the product (cost price); - vector of the parameters of demand for the product (projected sales volumes, upper and lower limits of demand prices, etc.); - a vector of quality characteristics n products -Analogues; - a vector of parameters of competition in the product market (market share of the i-th product, number of analogs, pricing policies of competitors, etc.).

In general, the whole spectrum of commercial activities on the Internet can be divided into groups:

• Various consumer goods are traded can be carried out (and carried out), not only via the Internet, but also by traditional methods (shops, kiosks, supermarkets, etc.);

• Specialized goods, which trade is most relevant and preferable through the Internet due to greater convenience and economy (the so-called digital, virtual goods);

• services, the offer of which exists outside the world network, i.e. their sale through the Internet serves as a supplement to the usual practice (such services include operations with securities, the sale of tourist vouchers, insurance services);

• The services that the offer is obliged to the emergence and existence of the Internet (web hosting, web design and other Internet services).

There are a number of characteristics, the presence of which is necessary for the goods to be recognized as acceptable for Internet commerce:

• high ratio of value to weight (ease of delivery);

• the high cost of purchasing in a regular store (the presence of a large number of intermediaries markedly increases the final price of the product for the buyer);

• Products do not spoil during transportation (without any problems, land transportation can be used);

• A large range of similar interchangeable products, which creates a problem of choice;

• Personal value for many consumers;

• actively consumed product;

• low cost of playback (copying);

• Absence of urgency in the consumption of goods.

At the same time, certain types of goods are not adapted to the Internet due to certain specific features. These are:

• goods of daily demand, which can be purchased at any store;

• goods and services of low cost, oriented only to the local market;

• goods and services targeted at low-income groups.

Developing a correct pricing policy, which will take into account all the key factors of pricing, begins with the definition of the range of online stores, where the popularity of commodity items plays an important role. Thus, the rating of product categories (% of the number of purchases made through the Internet), the most purchased on the Internet, can be represented as follows,%.

Books 46.

Consumer electronics 40.

Computers and software 35.

Cosmetics and perfumes 31.

Booking of hotels, tours and air tickets 24.

Booking/purchase of tickets

in the movies/theaters/concerts 23.

Clothing and footwear 23.

Baby products, toys 23.

Music, video 20.

Food products 15.

Medicines 15.

Sports Accessories 10.

Knowing the goods, the demand for which through the Internet is particularly large, you can analyze the demand for the level of its solvency, price sensitivity, the possibility of segmenting the market, etc.

Obviously, the cost estimate for the production and sale of the product occupies a basic position in pricing. Costs are traditionally understood as the amount of money needed to produce goods (services), promote it in the market and sell. Numerous editions are devoted to questions of an estimation and the account of expenses with a view of calculation of the cost price of this or that goods or service. The existing list of articles and cost elements as a whole is standard for any product sold in offline trading. However, if we talk about Internet trading, the essential features of which were mentioned above, then in the issue of costs, there are also a number of differences here.

The reason for all the differences is the presence of one more participant trading process - the Internet, which can be viewed as an electronic intermediary. Thus, for the conduct of trade via the Internet, there is a so-called electronic (virtual) store.

By virtual store understand online sites that show products, technologies, services to existing or potential buyers who can purchase the necessary product.

A virtual store can be highly specialized on the sale of a particular product or service or have a certain range of products offered (electronic department store). This type of electronic store is an analogue of an ordinary department store, in which various firms supply their goods. The costs of developing and maintaining an online store are one of the additional cost elements that distinguish e-commerce from traditional trading. However, many entrepreneurs working in the field of network sales, identify a number of factors that lead to a reduction in costs precisely in the conditions of Internet commerce:

- self-service when placing an order (the order is placed by consumers themselves, which leads to a reduction in costs for maintenance personnel);

- the limited inventory (and hence the reduction in storage costs) through the use of the EDI ( Electronic data interchange ), which allows to carry out JIT - delivery ( just-in-time - just in time);

- reduction of overhead costs for the organization of trade (equipment and work of outlets);

- digital products that occupy a significant segment of the Internet market, do not require physical delivery.

In general, the cost of organizing and maintaining an online store consists of the following elements:

1) the cost of creating a website: access to the Internet, hosting, registration of domain name, site design, etc .;

2) the cost of attracting and maintaining consumers;

3) advertising costs;

4) costs associated with the choice of payment system;

5) the cost of delivering the goods to the buyer;

6) costs for maintenance personnel.

Let's take a closer look at the most specific cost elements.

Hosting , or web hosting , pages on the Internet in the leased disk space of any server.

From where exactly the resource will be published, its attendance depends, and those opportunities that can be realized when it is used. Having studied all available options, it is necessary to dwell on one, based on the needs and real limits of the budget. Among the hosting options you can distinguish the following:

• Free;

• the provider;

• paid.

Free hosting. There is due to the fact that some companies provide a certain amount of disk space for hosting the web pages without requiring a fee for this service. No restrictions on the content of sites, as a rule, is not superimposed (and the commercial orientation of the pages is sometimes even welcomed). The meaningful content of the resource must correspond to a set of generally accepted provisions on the Internet, for example, materials that directly violate international law (on copyright) must not be present.

Free hosting has a number of shortcomings, the presence of which - a direct consequence of the lack of payment for this service. The most significant are:

• inclusion in each page of the site of compulsory advertising, which is a source of profit for the server owner, which objectively spoils its design;

• Inclusion of the email address in the mailing list of any spam agency, which will lead to a large amount of unnecessary information flowing to the address;

• wide popularity of addresses of services offering free hosting. This may adversely affect the reputation of the online store and its owner.

Hosting from the provider. Most Internet providers offer, together with any of their services, disk space for the organization of a commercial website. This option eliminates the negative aspects mentioned above (the provider is responsible for the quality and continuity of its server, the mailbox will not become full of junk mail, there is the possibility of technical support and the necessary consultation), but it has its drawbacks:

• The website address on the Internet may be long and unreadable;

• Strong attachment to the chosen provider company, which creates additional risks for the created online store.

Paid hosting. I in fact is deprived of the drawbacks mentioned above. Moreover, the cost of services often includes registering third-level domain , so the store's email address will look something like this: your_site. server.com (or .ru.) Companies offering paid hosting vary considerably in the services they provide, so it is necessary for the selected company to meet a number of requirements, including: the absence of strict restrictions on the maximum traffic flow between the Internet page and the client's computer (so-called traffic), since exceeding the permissible amount of monthly information transmitted from the server and to the server may entail an additional fee; the cost of hosting should include the registration of a third-level domain name in the zone of the server that provides disk space, etc.

The interaction with the buyer (real or potential) is one of the most urgent tasks of the owner of the Internet store. All types of activities in this area, as well as a list of costs associated with this arising, can be classified as follows:

• Attracting consumers:

- costs of web advertising,

- Free distribution of samples,

- free provision of information;

• activation of interaction with consumers:

- the cost of creating the Internet community and its personalization,

- the cost of collecting information;

• customer retention:

- the cost of optimization,

- the cost of improving efficiency.

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