Improving Decision Making Essay Example | Topics and Well Written Essays - 1250 words

meliorate Decision Making - Essay ExampleThe associations defence that the worth was part of a random price test and could be refunded solidified the suspicion further it was into dynamic pricing activity, as similar instances were off the beaten track(predicate) too many. Just like the company offered $51 less by Amazon than its own ordinary price on a dedicated bargain website (ramasastry, cnn.com).An analysis can be done from figures provided as trace wise sales entropy, of a particular book sold through this portal, (Niles, R., ojr.org). It shows that the company had plane high earnings through a dynamic pricing policy in the first quarter sales. Eleven and twelve copies of the same book were sold at the prices of $11.02 and $11.50 each one by one while in the second quarter the same book sold sixteen and eleven copies each at the prices of $11.02 and $11.70 respectively meaning a highly elastic nature of the books demand can be computed at a elasticity demand- coeffici ent of two, which is greater than unitary. It may be noticed here that there was an increase in sales of the books even when the prices charged were higher. If total earnings based on variable pricing quarter - on - quarter are considered , then they range from 15% to almost as high as 40%. This is where the marketers like Amazon.com have the opportunity to maximize their earnings from unsuspecting customers through their dynamic pricing dodging as even against a higher price Amazon sold more number of copies. The rest quarters also showed a similar effect.Benefits & disadvantagesThe benefits of dynamic pricing comprise of stimulating demand which helps to dig inventory quicker translating into more revenue and greater margins. The new focus is on target pricing, with engineering profiling the price sensitivity of customers to determine the selection of groups which can be discriminated on pricing. . It is believed by the company to help in maximizing the total revenue for the co mpany. The associates and partners of Amazon even share historical data of their dynamic pricing. (Liquid commerce, information-age.com). The disadvantages are also quite a few such as customer verity start disappearing once regular customers find out that they are being overcharged in stock to a new customer offered a lower promotional price . This could drive customers to bargain counters where everyone is handle fairly and there is no discrimination through dynamic pricing. The other drawback of this method may be a legal threat incase it appears that the firm is violating antitrust laws or not having a improve price policy. ConclusionHowever, it may be an end of an era of list prices where the product life vibration is short, (Strategic interactive marketing, managing change.com), the distance minimized and delivery lead times lessened with the help of technology and modernization. pains experts have reportedly observed dynamic pricing to be a boon to high fixed and low m arginal cost industries and also as a necessity for e commerce (Weiss, R., M. & Mehrotra, A., K.,