Pricing strategy of Amazon Free Essay Example

When talking about the online booksellign industry, the ofirst thing that comes to mind is Amazon. com. Amazon has been considered as one of he largest website which has different services and over 32 million clients and consumers in over 150 nation. It is an online retailer of published books and other goods and was built as a micro business in the US. It is considered as one of the famous site providing different products and goods and tok advantage of the optentials of onlie marketing approach (Christensen & Raynor 2003).

In addition, it is also known as an information broker that sells through the use of online proces. With their ambition f becoming a premier online retailer through leveraging their brands as well as models in business, the company used different pricing approach as compared with brick and mortar companies. The company have low prices compared to other companies with various discounts offering to their target market. To be able to stay competitive in the online market, Amazon’s pricing strategy composes the needs of the two out of ten approaches in price variation.

This includes Amazon’s approach of keeping the same price presently charged by the company but give the clients good quality. Herein, the management of Amazo sees to it that they keep their basic prices for their products and tried to give their clients a quality product that will meet their demands. It can be said that Amazon have great offers with affordable costs as their pricing approach because they know that there are many competitors online than brick and mortat companies (Gosain and Lee, 2002).

In this regard, it is said that price dispersion is lower in Amazon than in the price of brick and mortar companies and one of the reasons is that cost structures for retailer is continuously increasing (Smith et al, 1999).

Reference

1. Gosain, S. and Lee, Z. (2002). A Longitudinal Price Comparison for Music CDs in Electronic and Brick-and-Mortar Markets: Pricing Strategies in Emergent Electronic Commerce. Journal of Business Strategies Volume 19 (1).
2. Smith, M. D. ; Bailey, J. ; Brynjolfsson, E. (1999). Understanding digital markets: Review and assessment. MIT Working Paper, Massachusetts Institute of Technology, Cambridge, MA.