Research On Dynamic Pricing Of Durable Goods In E-commerce Environment

With the development of e-commerce, online store has become an important platform for retail, lots of Internet users have become accustomed to purchase durable goods online, such as computers, cameras and household appliances and so on. Faced with fierce competition in the market, durable goods, which with the relatively high sensitivity of price, are no longer suitable for a single traditional pricing methods. Traditional promotion sellers can offer discounts, produced by asymmetric price discrimination, costs of transport and search for promotional information. However, the booming Internet breaks down the barriers of geographical and time. It provides great convenience to online consumers so that they can spend less cost to obtain different product price information. Therefore, if sellers are just use some simple promotional strategies, which hard to manipulate the shopping behaviors of consumers with informed and mature strategy for sellers.Development of Internet also provides an unprecedented opportunity for online retailers to understanding their customers. Get pricing has become the key to the ultimate success of e-commerce. In the past decade, e-commerce provides sellers an experimental environment of dynamic pricing. For example, Amazon.com site analyzes user characteristic to charging different prices to consumer with different willingness of paying the same kinds of commodities. Although Amazon.com finally explained that that is just a random "price test", but so many customers find it’s unfair, resulting in resistance of psychological to dynamic pricing. However Hotware.com and Priceline.com are both Internet success stories, they use a business model based on opaque pricing changes. Opaque pricing strategy could help hotels and airlines sell the unsold products with an unlisted price to reduce losses. However, the design of opaque pricing is very complex. As for the strong buyers who boycott the price discrimination, the non-transparent pricing strategy is usually applied to the sale of perishable goods currently. But for general durable goods, consumers will not meet the problem about product availability, and price discrimination resistance of consumer needed a great concern, and opaque pricing strategy is not very suitable. So, how can we provide online sellers, who sales durable goods, a seemingly fair strategy for the price discrimination?Based on the analysis of domestic and foreign on current dynamic pricing, and combined with the feature of new e-commerce, we proposed a strategy and dynamic pricing model for durable goods. Then, the model and strategy utilize the data mining techniques to predict consumer utility discount factor. Finally corporate maximum profit pricing model with study on small household electrical appliances consumption data, we make a case analysis. The main contents are as follow:First, by analyzing the background and significance of dynamic pricing, we reviewed the research findings in this field and elaborated the traditional pricing theories, and introduced dynamic pricing theory. Then we introduced some of benefit analysis, applicable conditions, social welfare and price discrimination resistance of dynamic pricing. Last, we analyzed the impact of the e-commerce environment for dynamic pricing, the characteristics of durable goods and the existing pricing model.Second, we proposed a kind of dynamic pricing model and strategy for durable goods in e-commerce environment. The model and strategy building process:the transition probability matrix of state price is modeling, then this paper analysis the consumer behavior in-depth, through consumer utility analysis modeling the consumer purchase decision. Then the expected profit model for online retailers be constructed. Last, we demonstrate the effectiveness of the policy by a mathematical process. Numerical simulation analysis, parameters and modeling impact analysis are made for further research. After doing so, we can get some constructive conclusions.Third, the fuzzy C-means clustering algorithm is proposed based on the measurement model of consumer utility discount factor. Combined with dynamic pricing models and strategies that have been proposed, we made a study by using consumption data.