Intelligent Enterprises of the 21st Century

Mahesh S. RaisinghaniUniversity of Dallas, USA

Copyright 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Abstract

Setting the right price has a lot to do with assessing value. Understanding value is a direct result of understanding customers. Intelligent enterprises should use the power of the Internet to collect and process information to rethink their pricing strategy and gear it to customer perception of value. This chapter explores the impact of the Internet on pricing and demonstrates that rather than pushing prices universally downward and squeezing margins, the Internet provides unique opportunities in pricing to enhance margins and generate growth. It expounds on the low-online pricing myth and the dimensions of e-price improvement. Some models of real time and dynamic pricing are explored and implications for theory and practice are discussed.