Dynamic Pricing: Ripping You off in Real Time

Imagine if you physically walked into a small boutique clothing store, started browsing through one of the racks, saw a top you liked, made note of the price, but kept looking to see if there was something better. A few minutes later you conclude there isn’t anything else that catches your eye so you go back to the original rack but now the item you want has just jumped up in price!

You stare in disbelief at the Store Clerk, did they just somehow notice your interest in the top, sneakily pull out a new price tag for it, switch the tags and return to where they were all within 30 – 60 seconds and without you noticing? You can swear they haven’t moved from behind the counter, in fact, you doubt they have even acknowledged your existence at all!

online-shopping

This is what is happening online, known as Dynamic Pricing. The ability to instantly alter the price of a product based on the information about you it has just immediately gathered during your visit to that shopping website. Why? How? Because in the brief amount of time you have spent browsing or researching for a particular product on that particular shopping website, it has researched the sh*t out of you and determined just how much you’re willing to spend.

Like a Boss Sucker!

Marketing research is conducted for any number of reasons which include:

  • Identifying potential customers
  • Understanding your existing customers
  • Develop effective strategies relating to promoting and pricing your product and/or service
  • Identify business opportunities
  • Prepare for business expansion

To quote Iacobucci, “Every Marketing decision should be based on facts. Marketing research is about gathering those facts.” (Iacobucci 2014, p. 199). Since the birth of commercial radio broadcasting in the 1920s, to television in 1941, to the world wide web in 1989, where there was a medium, there was media, where there was media there was marketing and where there was marketing there was market research.

There are multiple techniques and Iacobucci elaborates on the more popular methods including:

  1. Cluster analysis for segmentation – Consumers complete a survey based on perceptions, attitudes and beliefs to certain things and Researchers cluster those consumers into segments based on what they have in common as per the survey results. This allows businesses to identify and target potential customer markets most suited to their product.
  2. Perceptual mapping – consumers are given surveys focusing on their perception of a brand’s product in comparison to similar products. This gives an idea into how a product is perceived in comparison to the competition.
  3. Customer satisfaction feedback – A survey is completed – I’m starting to see a common theme here – asking consumers to rate their level of customer satisfaction based on their recent interaction with that business. A business can use the feedback to evaluate and improve their level of customer satisfaction.

(Iacobucci 2014, p. 199).

With today’s technology it is less

total-recall-movie-image-kuato

“Open your mind” – Quato from Total Recall

about surveys and more about data mining and big data analyses. Businesses want to get into your head, open your mind and suck out everything they can.
Why? Because as explained in the following video, we let them!

 

To thank us, businesses use the information they collect to manipulate us into spending more! But even if we aware of all the tricks, are we then free to make our own decision? Or are we still playing into the hands of the producer like this video suggests?

It’s mind blowing how so much of life is tracked in real time. That with real time data collecting, real time marketing mixes can be enforced. A decision doesn’t even have to be made anymore. Just let an algorithm do it!

Uber logo

Uber’s dynamic pricing model caught the attention of the consumer in recent months.

But it works both ways and there are forces out there willing to help the consumer rather than rob them.

For example, come May 20 there will be access to real time fuel price data. No more trying to work out the weekly trend of fuel prices! Finally, a chance for consumers to fight back. I would like to think that this is just the beginning. That it’s added, shall we say, fuel to the fire!?

Viva La Resistance!

SimoniswhatSimondoes (with special video appearances by our lecturer Dr Paul Harrison).

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