ajaz_eco_204_2012_2013_chapter_16_Market_Power

But today its all about clicks and bricks the value

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Unformatted text preview: ds McKinsey's Zawada: "A lot of that was because they did not use their two-way information power with customers to price strategically." The lesson? Interactivity is squandered for many companies unless they also use it to manipulate price. And when it comes to pricing, there is much more wiggle room than one may think. In a recent study, Erik Brynjolfsson, codirector of the Center for eBusiness@MIT and professor of management science at the university, found that prices for books and CDs could vary as much as 47 percent across Internet retailers. "Price isn't necessarily the most important thing to online shoppers," he says. Further, while it's easy to compare prices online with so -called shop-bots and other Web-based technologies, few consumers now take advantage of them —fewer than 5 percent of Internet households in a recent McKinsey study. Amazon.com Inc., for example, rarely offers the lowest price for books or music, yet is the number -one online retailer in those categories.The key, according to pricing experts, lies in integrating online a...
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This document was uploaded on 01/19/2014.

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