Friday, April 22, 2016 |
Have you heard the term Dynamic Pricing? Did you know that if you get down from a swanky new car to buy fruits from the street fruit vendor, you would be charged a premium price for the same fruits ,over what a person who buys the same arriving on foot? Well this is the craft called “Dynamic Pricing”. This strategy is being used not only by street vendors but now even by complex computer algorithms to determine the pricing in various industries starting from e-commerce to travel portals to take maximum advantage of a rapidly dynamic demand scenario. Almost every product or service bought on the internet is subject to dynamic pricing and if you are to succeed on the internet it is important that you develop a fair understanding of the concept. We at Complete Web Graphics (CWG) being a leading Web Development Kolkata, India try to attempt to give you basics of the concept of “Dynamic Pricing”.
Dynamic Pricing :
Dynamic pricing also called “Real Time” Pricing in simple terms is setting the price of a product or service, the demand for which is very dynamic and thus is kept flexible to optimize the given situation. Often there is a common misconception that dynamic pricing is exploitative pricing. But this is not always true because it is not necessary that the supply and demand of a product or service are always balanced. The goal of dynamic pricing is to monitor the demand of the product or service very closely. This is done by means of pricing bots. These software agents gather data and use algorithms to adjust the price according to demand and take maximum benefit of smart spending decisions. Typically factors like the location of customer, the time of the year, the day of the week, the time when the query is being made, the competitor’s pricing are all analyzed through what is now called “Big Data Analytics” for determining the price. Let us take a case where in a group of friends decide plan together a trip to Ladakh over social media. They all log in to their respective digital devices to check on the air fares only to find that every time a new search is made the price keeps fluctuating significantly may be even by a few thousands of rupees. The result is on account of a real spike of real time demand to optimize the price as a result of Dynamic Pricing.
Thus in case of the travel industry apart from simple demand and supply other variables such as festivals or holidays, time of the day and occupancy are all factors leading to rapid price changes what is a result of dynamic pricing. In case some cab- hailing apps like “Ola” and “Uber” time of the day when query is made is also considered. This is why you would have to pay a fare may be 1.5 to 1.6 times more if you are travelling at a prime time may be during office hours than other times. In case of airlines, too, the time at which flight is operating is an important factor apart from other factors like how many flights are operating in the route. Some other factors like the device from which the query is being made also matters. This is why you may end up being shown a higher price if you are making the query from the latest I-phone model rather than an old desk top computer. In what is being termed by industry experts are now calling it a smart way of pricing on the online commerce platform. However if you are to survive in this highly competitive digital world you must employ the latest strategy of “Dynamic Pricing”.
Visit Complete Web Graphics (CWG), Web Design Company India, to avail services like Mobile App Development, IOS App Development, Android Development, CMS Development etc. We provide Web Designs at affordable price.