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their potential for strategic pricing—and offered few lessons on how to do interactive pricing well. There was an early
assumption among many early e-tailers that they had to compete on price—a preoccupation that led to some famously
brutal price wars and directly brought about the demise of many Internet pioneers, says McKinsey's Zawada. M any
Internet companies pursued tactics that were ultimately self -defeating, including competing on unsustainably low prices,
setting identical prices across all customer groups and failing to change prices in response to changing demand, even
though that would have been easy. The result: E-tailers spent marketing dollars in ways that had little direct bearing on
ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. profitability. Many e-tailers failed while Americans increased online spending 66 percent in 2000, to $44.5 billion,
according to a recent report by the Boston Consulting Group. Ad...
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- Fall '14
- The Land