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Author: Burkhardt Funk

Affiliation: Leuphana Universität Lüneburg, Germany

ISBN: 978-989-674-006-1

Keyword(s): Electronic commerce, Pricing strategy, Price optimization, Price tests, Price dispersion, Non-interactive prices, Demand curve, Posted prices.

Related Ontology Subjects/Areas/Topics: Business and Social Applications ; Case Studies ; Data Engineering ; e-Business ; e-Marketing and Consumer Behaviour ; Enterprise Information Systems ; Global Communication Information Systems and Services ; Health Engineering and Technology Applications ; Neural Rehabilitation ; Neurotechnology, Electronics and Informatics ; Ontologies and the Semantic Web ; Simulation and Modeling ; Simulation Tools and Platforms ; Telecommunications ; Web Information Systems and Technologies ; Web Interfaces and Applications ; Web Personalization

Abstract: Price dispersion in the Internet is a well studied phenomenon. It enables companies to adjust prices to a level appropriate to their strategy. This paper deals with question how Internet retailers should do so. The discussed method optimizes short-term profitability by determining the exact demand curve. The method involves the application of empirical price tests. For this purpose visitors of an Internet retailer are divided in statistically identical subgroups. Using the A-B testing method different prices are shown to each subgroup and the conversion rate as a function of price is calculated. We describe the organizational requirements, the technical approach, and the statistical analysis applied to determine the price optimizing the per-order profit. A field study carried out with a large Internet retailer is presented and shows that the company was able to optimize a specific price component and thus increase the contribution margin per order by about 7%. We conclude that the dis cussed method could be applied to answer further research questions such as the temporal variation of demand curves. (More)

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Paper citation in several formats:
Funk B. and (2009). OPTIMIZING PRICE LEVELS IN E-COMMERCE APPLICATIONS - An Empirical Study.In Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2009) ISBN 978-989-674-006-1, pages 37-43. DOI: 10.5220/0002186700370043

@conference{ice-b09,
author={Burkhardt Funk},
title={OPTIMIZING PRICE LEVELS IN E-COMMERCE APPLICATIONS - An Empirical Study},
booktitle={Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2009)},
year={2009},
pages={37-43},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0002186700370043},
isbn={978-989-674-006-1},
}

TY - CONF

JO - Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2009)
TI - OPTIMIZING PRICE LEVELS IN E-COMMERCE APPLICATIONS - An Empirical Study
SN - 978-989-674-006-1
AU - Funk, B.
PY - 2009
SP - 37
EP - 43
DO - 10.5220/0002186700370043

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