Blog #5 Dynamic Pricing: Is It Good or Bad for Consumers and Markets?
Feb 19th, 2024 by John DeGraff
While hotels and airlines have used dynamic pricing for a long time, the last few years have seen an increase in marketers using dynamic pricing to offer their product/service to consumers at the right price based on time or other factors that allow the company to maximize profit. In the age of “big data” and multi-channel shoppers, retailers and manufacturers have a massive amount of information to use to create dynamic prices. Amazon.com and other e-commerce retailers have popularized this pricing method. But they are not the only ones taking advantage of frequent and real-time pricing strategies.
As an example, a number of professional and collegiate sporting events now price tickets based on demand and offer dynamic pricing instead of standard ticket prices for all games. Bloomberg Business reported certain ski resorts started testing dynamic pricing models in February 2015. Uber’s innovative disruption on taxi services also uses dynamic pricing based on demand, weather conditions, driver availability and other factors. However, posts from Forbes.com and MIT Technology Review suggest consumers may not always be happy with this type of pricing strategy, suggesting marketers must carefully consider the impact of dynamic pricing on consumer attitudes and behaviors.
Marketers continue to use dynamic pricing as a method to increase profit margins in today’s data-driven world.
Assignment: After reading Greg Petro’s article on dynamic pricing which appeared on Forbes.com. Blog on dynamic pricing and then watch the Uber Dynamic Pricing Video. When/where marketers might use it, what ethical concerns do you think consumers might have about marketers using dynamic pricing? Why?
At least 150 words posted by Sunday, Feb 18th worth 10 points at 11:30 pm
After watching the video I learned that dynamic pricing is a way companies change prices quickly based on things like how much people want something, how much of it is available, and other factors. It’s getting more popular in many areas because of better technology and lots of data. For example, Amazon changes prices on its products to make more money, and Uber changes its ride prices based on things like how many drivers are around or the weather. However, many people disagree with this way of pricing. Some people think it’s unfair, especially when they have to pay a lot more than usual. In my opinion it looks like the company is taking advantage of them when they really need something or want to buy something when the demand is high. Also, it’s not always clear to customers why the price went up, which can make them trust the company less. And sometimes, dynamic pricing can make it harder for people who don’t have a lot of money to afford things when prices go up. In conclusion I believe Companies need to be careful with dynamic pricing. They should be open about how they decide on prices and try to make sure their customers don’t feel cheated or left out. This way, they can use dynamic pricing to do better in business without losing the trust of their customers.
Marketng 311-22
John Degraff
Dynamic pricing is a method used by companies/ suppliers to maximize every transaction with every customer. In todays world with all of the technology and bug data it is very easy for companies to determine which customers would have payed more or which would have bought the product if it was cheaper. Companies can also determine who will pay more based on which type of computer the customers own or their distance from the actual store. Based on all of this data, companies can give discounts to certain customers or take advantage of customers that are frequent buyers and charge them more. Marketers today can use it anywhere and anytime because of all of the technology. But I mostly see it with concert tickets, airline tickets, and on apps such as Doordash or Uber where the price depends on the amount of drivers and driving conditions. Customers might have many ethical concerns with dynamic pricing. Such as “am I paying more for an airline ticket just because I am a frequent flyer so they know that I need to buy this ticket?” and “are they charging me more for the exact same product online vs. the store because they know that I only live a mile from the store so they want me in the physical store so I might buy more item while I am there” These two examples might make the customer think that they are being taken advantage of by these companies by use of data and info that doesn’t seem ethical.
I have heard about dynamic pricing before but the article and video really explained it further to me. Marketers will use this to maximize profit for the business. As we saw in the Uber video, Uber uses dynamic pricing when they have a huge influx of riders and not enough drivers. Airlines also use this on flights, people who book further in advance typically get a lower price versus booking a day before the flight, the price is higher based on demand. When I read the article, I found dynamic pricing to be highly unethical. I personally would be pretty upset if I knew I was being charged more and someone was being charged less or getting a coupon/discount because they lived closer or shopped an item more. This can lead to distrust within a company and as a consumer, I would definitely be less likely to purchase from that company again. The Uber video did make more sense to me because they are transparent about the price increase with their customers prior to booking the ride. I think it is more ethical when consumers are informed about the price increase/decrease.
Marketing 311-22
Dynamic Pricing is a new term to me and after reading and learning about it, I concluded that it is situational whether dynamic pricing is ethical or not. Depending on the situation where the companies are changing their prices. When I think of companies changing prices, I first thought of Wisconsin Dells. During this time of the year, when people are not visiting hotels and waterparks as much, they are cheaper in price. When it turns to summer time, they are much higher is prices, everyone is out of school and more likely to go to the dells, they they raise the price. This is a tactic they use because they know that the dells is more of a seasonal vacation spot. I also think about sport tickets, People are buying tickets immediately when they are available, they are going to pricey and in demand. When someone goes to buy a ticket the day before, they are more likely to get a cheaper ticket, in a good spot. These companies and businesses are going to want to get the money, either way, whether they are going to sell front row ticket for 800 dollars, or they are going to sell it for 100 dollars. Dynamic pricing is completely situational. I feel as if people get more informed about dynamic pricing they will be able to understand the behavior and tactics of companies and be able to get around the price changes.
John DeGraff
MKT 311-22
Before reading Greg Petro’s article on dynamic pricing and watching the Uber Dynamic Pricing Video, my knowledge about dynamic pricing wasn’t very strong. I knew that Uber and sports events would change their prices for certain events/times but I didn’t know the unethical ways of doing so. The idea that companies, including those in the sporting events, ski resorts, and transportation industries, adjust prices based on demand and various real-time factors is interesting.
Marketers might use dynamic pricing in scenarios where demand fluctuates, such as during specific seasons, or events, or based on supply and demand dynamics. The concept of adjusting prices in response to changing conditions to maximize profits seems both innovative and logical. However, I can understand the ethical concerns consumers might have about this pricing strategy. There could be worries about fairness, transparency, and potential exploitation, especially if consumers feel they are being charged more due to increased demand or other external factors beyond their control. Marketers need to be mindful of these concerns and ensure that dynamic pricing strategies are implemented ethically, with clear communication to consumers about the rationale behind price adjustments.
Marketing 311-22
John DeGraff
After reading the article and watching the video, I found more clarification on dynamic pricing. With improving technology and statistics it has become easier for companies like Uber and Ticketmaster to become aware of when to increase or decrease pricing. As Real Estate agents, we are constantly addressing the price-fixing issue in our business, but personally, I don’t believe Uber is price-fixing as customers are constantly aware of prior prices compared to the prices in demand. As security Uber makes the individual type in the price they are paying for as another form of confirmation, so people can’t come back at Uber. A part of me also feels like Uber takes advantage of large populated events, but when other products are in demand, pricing is raised so I feel like it’s only fair they also can. If more people were aware of and understood dynamic pricing individuals would be much more understanding. In the past few years, the price of concert tickets has skyrocketed due to high demand. Artists and ticketmasters may have their own formula for dynamic pricing in the music industry and I would love to see the data.
Marketing 311-22
John DeGraff
Before reading the article and watching Uber’s video, I had no idea about dynamic pricing. Dynamic pricing is when a company will use data about their consumers, and then charge them a different amount. This sounded unethical to me at first when reading the article but uber flipped my perspective. In the article, it talked about how one company would give coupons to families who purchased more eggs because they were giving value to that product. Another example was with staples charging less to someone who lives closer to their store. On the other hand, Uber talked about how they use dynamic pricing when addressing demand and supply fluctuations. This made sense to me because workers would feel more inclined to drive if they were getting more money.
I think that marketers should use it situationally like in the situation of problems with supply and demand. Although that won’t make the company the most profit, it is morally the correct thing to do. In addition be transparent about it because otherwise, consumers might be blindsided and no longer trust the company. Consumers may see it as unethical because it could exploit a certain group of people, it’s not fair, and it’s using their data to not benefit them.
Dynamic pricing is a strategy that allows marketers to adjust the prices of their products or services based on the demand, supply, and other factors. While this can be beneficial for both businesses and customers, it can also raise some ethical concerns.
I would say first are foremost, customers may feel deceived or manipulated if they are not aware of how the prices are determined or why they change frequently. Furthermore, it can raise issues and concerns about privacy. The consumer may be concerned about how their personal data is collected, used, and shared by marketers who use dynamic pricing. They may worry about the security and confidentiality of their information, as well as the potential misuse or abuse of it by third parties.
Lastly, I could see trust being an issue. customers may lose trust in the brands or platforms that use dynamic pricing, especially if they perceive that they are being exploited or treated unfairly. They may also question the quality or value of the products or services that have variable prices, and switch to other alternatives that offer more consistency and reliability.
DeGraff Marketing 311-22
A reasonable concern consumers may have with dynamic pricing is when it involves a good or service that is a necessity. For example, inflating prices of items like food or medicines because consumers need these items and not because of an economic factor that justifies this price increase can leave consumers feeling taken advantage of. Not only that, but it is unethical in some circumstances. In cases of natural disasters, the government often intervenes to prevent companies from price gouging.
Uber’s dynamic pricing is not an unethical example because pricing directly relates to the number of drivers available, and it is not a necessary service. Overall, I think dynamic pricing is a fair method of doing business so long that it does not jeopardize the needs of consumers relating to survival and well-being.
Marketing 311-22
John DeGraff
Dynamic pricing is a business strategy where companies adjust their prices based on various factors to maximize revenue. Dynamic pricing is when companies change their prices based on different factors. In today’s tech-centric world, companies leverage extensive data to understand customer behavior. If you often shop online, for example, companies might charge you more because they know you’re a frequent buyer. This pricing tactic is prevalent in industries like ticketing and on-demand services such as food delivery apps. Despite its benefits for businesses, dynamic pricing raises ethical concerns among consumers. Questions arise about whether individuals are charged more based on factors like loyalty or proximity to physical stores. Understanding the ethical dimensions of dynamic pricing empowers consumers to make informed choices in the face of fluctuating prices driven by strategic business decisions. This awareness becomes crucial as technology continues to play a central role in shaping contemporary commerce.
Marketng 311-22
John Degraff
Dynamic pricing is the fluctuation in price of different items at different times (also in different Geo-locations, etc.) throughout the day that can potentially cost a customer more or less for the same item. From a marketing standpoint, dynamic pricing is a way to increase profits and get the most out of every consumer transaction. I think that Ubers use of surge pricing is a great structure to put in place, after listening to the YouTube video and reading the Forbes article it became clear that customers are made aware that they are going to be charged a premium and at certain points even has the consumer manually confirm the increase. By being fully transparent with a customer and even offering to provide notifications when the prices go down appears ethical from a business standpoint. On the other hand, when a company, such as culvers engages in this pricing structure and is not as transparent it pushes more customers to think they are being taken advantage of and has the potential for a customer to view the company as unethical and sneaky.
MKT 311
The article goes over how dynamic pricing is being more accepted. It also describes dynamic pricing as setting prices for goods and services based on real time demand and supply conditions. There are certain sectors where this type of pricing is more accepted, such as retail, hospitality, and travel. Companies like Amazon and Walmart are examples of brick and mortar companies that execute this kind of pricing, but Uber was one of the a companies that was being more scrutinized by its customers. This is because the optics of this kind of pricing by customers can seem predatory or like price gouging. Especially for Uber during high demand like around a popular sporting event, concert, etc. The article mainly uncovers the ongoing adoption of dynamic pricing by retail and consumer services. It also details the role of technology using this strategy to drive more revenue.
Marketing 311-22
John DeGraff
I think the discussion about dynamic pricing is an interesting one, and a concept that has definitely been implemented pretty recently. It’s a new concept, and I think the Uber example is one of the better examples that shows how dynamic pricing works. When the demand for an Uber is high in any particular area, due to various different reasons, the price goes up. So this pretty much means that if there is a lot of people trying to get an Uber in the same area at the same time, than the prices for those Uber’s are going to be high. So dynamic pricing is prices that change based on demand, but the ethical concern I would have is, sure the price goes up when there is higher demand, but does the price actually decrease when the demand is lower? Companies try to take advantage by charging higher prices when demand is higher, but do customers actually get a lower price when demand is low? That would be true dynamic pricing and the most fair way to do it, but I don’t have a lot of experience with Uber or other dynamic pricing companies, so I’m not sure if that is actually the way it works. But it’s definitely the main question and ethical concern that comes to my mind.
I think marketers have the opportunity to use dynamic pricing in almost all industries. Because specific demographics are more or less likely to purchase a specific product or service, they can use the data on those demographics and price their product accordingly. There is an ethical issue here involving the use of Big Data and another one involving the use of dynamic pricing.
First, I think that companies should not be able to hide or manipulate an everyday consumer into sharing data. There should be explicit agreements as to what data is shared because there are many benefits consumers can get through Big Data if they choose.
The second ethical concern regarding dynamic pricing is how they target different demographics. Marketers pick a target audience for a reason, so it makes sense to allow other audiences a cheaper product as an incentive for them to use it. I think dynamic pricing is good when it deals with benefitting consumers based on the time of buying, like Uber or a baseball ticket, but not when it changes based on who is buying.
Marketing 311-22
John DeGraff
Dynamic pricing is incredibly interesting. It allows businesses to make changes to the price of goods and services based on location and demographic details. I never knew that companies did this or even that they were able to do it. However, with all the data that is collected on consumers now, I can see just how easy it would be to use that information to generate more sales. I see this being used all the time, but the most prominent way that it could be used is with tickets that have limited availability, such as sporting events or concerts. Now that I think about it, I did notice one time when the price for a ticket to a sporting event decreased over time. Some friends and I were deciding whether we wanted to go, and that took a while. The prices for seats in the area we wanted eventually went down, and we jumped on it. I do see some ethical concerns with dynamic pricing. I feel as if it is unfair to individuals who have to pay more for the same product. If you are getting the exact same thing, it should be the exact same price. I don’t feel this way for events because the tickets just wouldn’t sell if they didn’t lower the price, but goods that people need should not be affected by dynamic pricing.
MKT 311-22 John DeGraff
The concept of dynamic pricing itself does not concern me. This is because, we are always deciding whether or not the trade of time, and money is worth whatever we are getting in return. Based of of this, if someone is willing to pay a higher price is it unethical when they make the trade at a higher price? I don’t think so. However, a way this can be used unethically is an invasion of privacy. Using customer information that they aren’t willingly sharing to a company, even if the information is available, seems unethical to use to tailor an ad, as well as price. However, it seems this is where businesses are moving to maximize profits. This system seems more fair in a bartering system, where the customer has influence to negotiate a price, for example when buying a used car. However, tailoring prices to customers without their knowledge, or ability to rebuttal, seems an unethical invasion of privacy. My one exception is shipping costs based on distance, which isn’t as much a dynamic cost as a rate based on milage. However pricing to a customer because of where they live, or how far away from a store to make them more likely to buy a product does constitute an invasion of privacy and seems an unethical dynamic price.
MKT 311-22 John DeGraff
Dynamic pricing is a marketing tool that is controversial in its practice. Uber is the company taking most of the criticism for this practice of dynamic pricing, but many other retailers and travel companies utilize dynamic pricing for their own goods/services as well. The definition of dynamic pricing is to set prices for a good or service in the moment, based on demand and availability of supply. In the Forbes article, an example they share is the demand for an Uber during a snowstorm in New York City. The supply of Uber drivers during a snowstorm may be lower than on an average day, and the demand for an Uber may be higher than on an average day. This supply and demand relationship fuels dynamic pricing to adjust the price of an Uber in this scenario to be more expensive for the consumer. There are some ethical concerns that consumers might have with companies utilizing dynamic pricing. The main ethical concern was addressed by the example I gave earlier, rising Uber prices in the midst of a snow storm in New York City. Many customers were upset because they felt taken advantage of by Uber because of their need in an “emergency situation”. The main ethical concern here with dynamic pricing is that the customer is subject to exploitation by brands when demand is high. I believe this is a concern that businesses need to pay attention to because one of the reasons that customers may not purchase a good/service with a company is because customers do not like feeling manipulated. With this in mind, businesses need to be careful when to utilize dynamic pricing, and to what extent.
I think the most obvious and most harmless implementation of this strategy is in situations like the one mentioned in the article where egg coupons were sent to people who buy lots of high protein foods. Companies have been using this and similar strategies for a while, but there are major ethical concerns. Even in a seemingly innocent situation such as the one mentioned above, customers usually don’t like having their data tracked and stored by businesses. I also have ethical concerns about how far the idea of dynamic pricing could go. The article says it is used to in ways that will benefit the customers, but I fear it being used in a much more malicious way. Even the airport example worries me because the company is assuming that someone is flying a lot for business. There could be so many other reasons someone would fly often, such as a person who doesn’t own a car going to help a sick family member. The article makes dynamic pricing seem like a good idea, but I am very concerned about how far today’s companies will push it.
One thing that might worry customers to start, would be the communication of dynamic pricing. Without a clear explanation as to why a price may be fluctuating, it may be difficult for a customer to understand why they are paying a certain amount for a product. This can cause customers to buy products that are the same, but different in price. When there is dynamic pricing, it makes it, so the customer is able to navigate through to find their product at the best possible price. Another way people may see dynamic pricing in an unethical way, would be during some sort of natural disaster, or health crisis like covid. Customers may feel unwelcome to the marketers here, because they feel like they are taking advantage of a situation that shouldn’t have happened in the first place. Lastly, the customer may just feel uneasy wondering if the price is actually accurate or not, by not using a standard pricing method, this makes customers question whether or not they are actually getting the best price available to them.
Before watching the Uber video as well as reading the dynamic pricing article I didn’t have much knowledge on it besides when special event happen or sales occur the pricing for items or services changed but after reading and watching I found out that it’s really when companies use data to charge a different price based off the type of consumer for example like in the article if you go on a shopping website your ip address is already provided so your charged with a certain price than the next person. When looking at the video Uber uses dynamic pricing when big events occur in which is based on the amount that of drivers are available which some people would prefer to wait than pay extra, when it comes to dynamic pricing companies should be careful on how much they are pricing consumers because it plays a significant part in how much profit is made.
The way that companies are able to use technology to evaluate customers purchasing habits in order to get the most out of their branding. THis tehcnology like uber shows that the dynamic pricing and also the customer based technology is able to be resourceful for the clients.
MKT 311-22 John DeGraff
Dynamic pricing, a strategy that tailors prices based on individual customer data and market conditions, has become increasingly prevalent in the modern business landscape. Greg Petro’s article on Forbes.com sheds light on the implementation and implications of dynamic pricing in various industries. As marketers, it’s crucial to understand when and where dynamic pricing might be used and the ethical concerns it raises among consumers. Marketers deploy dynamic pricing in situations where they can utilize customer data and market dynamics to maximize profitability. For example, online retailers like Amazon adjust prices in real-time based on demand, competitor prices, and customer browsing history. However, while dynamic pricing offers benefits such as increased revenue and improved efficiency, it raises ethical concerns among consumers. One primary concern is price discrimination, where customers feel unfairly targeted or discriminated against based on factors such as their demographics or purchasing behavior.
Moreover, dynamic pricing can lead to transparency issues, as customers may perceive prices do not reflect actual market value and might be paying more than others. For example, if a company offers discounts exclusively to new customers while maintaining higher prices for existing ones, it could create a sense of unfairness and dissatisfaction among loyal patrons. This practice may alienate long-term customers and damage the company’s reputation in the long run.
Marketing 311-22
John Degraff
I’d never heard about the term of Dynamic Pricing, however, I had an understanding that some products are priced differently based on the target market. Dynamic pricing is defined as the process of changing prices between different goods and/or services, specifically based on the type of customer the product is being sold to. This is also known as surge pricing or individual pricing, or pricing discrimination. Marketers will use dynamic pricing in instances such as; creating discounts for specific identified groups of people, discounts or price increases based on time, competitor based pricing, value based pricing, etc… As far as customers potential ethical concerns regarding companies using dynamic pricing; would be questioning a company’s value of their customers through fairness to their customers. Being customer focused would mean getting the best price, quality, ect., for all customers and this would be in question when companies are using dynamic pricing.
Marketing-311 section 22
Prior to watching the video, and reading the article, I was not very familiar with Dynamic Marketing. I have heard the term a few times, but never had a general understanding of what it was. But, now I know that it is a method used by companies or suppliers to maximize every transaction with customers. It also helps maximize the profit. In the video, it is clear that Uber uses dynamic pricing when they experience a high volume of riders and not enough drivers. In the article it was evident that the practices they were performing are unethical. Overall, I think that Uber takes advantage of a lot of situations. For example, they charge more in populated areas, have individual type pricing, and raise prices as they see fit. I think if people were more aware of dynamic pricing like this they would be more understanding of situations. I think about vacations specifically. I know that I am going away for spring break, which is a popular time to take a trip, specifically in a warm area. Airline companies, hotels and AirBNB which increase their prices around these times. This is a business move in order to maximize profit because it’s a high demand period.
MKT 311-22 John DeGraff
After watching the video nad reading the article I learned that dynamic pricing is a strategy that businesses use quickely change prices. Businesses will change prices based on how much of a supply and demand there is for a product or service. In the case of Uber if there is a high demnd of people needing an Uber they raise the prices so that drivers are more willing to drive. However if there is a high supply of drivers and a low supply of people in need of transportation they lower the cost of Uber so there is less drivers wantind to drive and more people wanting to take Uber which will result back to the first supply demand example. Dynamic pricing allows for businesses to have a continuous cycle that will cater to meet supply and demand needs. There could however be ethical concerns with running a business with dynamic pricing. If a business is ran like this it should be know to customers that it is. Yes prices are always changing however customers should know if the product or service they want will be consistent or not. Being transparent in this process will also help to creat customer loyalty for these businesses. Another important to note when changing prices is things happening around teh area of the price change. it is important to stay consisitent and in Ubers case riase prices all times there is demand not just sometimes when there is demand. Personally I would feel bad changing the prices constantly on my customers. I would not like knowing that the product or service they want is changing possibly not allowing them to buy it anymore becaue of the price change. However it does make sense in a business aspect to fit into supply and demand pricipals.
MKT 311-22 John DeGraff
After watching the video about Uber’s dynamic pricing, I believe dynamic pricing is important because when the demand exceeds supply it can encourage, in this case, more Uber drivers to become available. That said, I believe that dynamic pricing could become exploitable by, in this case, Uber drivers, by simply waiting until the prices rise before engaging with consumers wanting a ride (but one would also have to consider how often this happens). Additionally, I can see how from a consumer standpoint it can seem as though the prices increased out of nowhere, which may lead to consumers finding another cheaper alternative (if possible). However, when dealing with prices changes, I believe Uber does it well by requiring the riders to understand why the prices may have gone up and requiring the riders to type in the amount of the trip when the prices doubles. This way I feel the consumer(s) feel they aren’t being cheated out of money for no reason.
I believe that marketers can use dynamic pricing in all sorts of entertainment, tourism, and transportation services because different areas, states, countries, etc., all have different prices for different seasons for different areas. For example, tourists visiting Miami, Florida during spring break may experience higher prices because of the significant influx of other tourists which outweigh the current supply due to increased demand.
MKT-311 Professor DeGraff
After reading the article and watching the video for this blog post, I feel that marketers could use dynamic pricing when demand is high and when sufficient data is known on the specific consumer. The dynamic pricing used based on demand can be seen as recently as this week at Wendy’s as they announced they would be trying “surge pricing” around peak demand times which would increase the price of food at times such as lunch and dinner. This has seen lots of backlash and increased social media outrage as these effects were announced. This leads us to wonder if these surge prices are ethical to the consumers? Obviously, this example has shown that consumers do not like the idea of surge pricing, as it seems that the corporations are greedy, but that might not be the whole picture. If dynamic pricing is used, the prices would be more expensive than before at certain times but could be cheaper than before at non-high-demand times. Overall, dynamic and surge pricing do seem predatory if used to just increase prices and nothing else but can be helpful if discounts and prices are lowered for certain consumers.
Marketing 311-22
John Degraff
It has become more and more common for big data companies to use dynamic pricing. However, consumers have expressed concerns about the ethical implications of such practice. There are many companies that use dynamic pricing in addition to hotels and airlines, such as e-commerce, event tickets, and Uber. Consumers worry about how fair this is when prices fluctuate due to factors beyond their control and have no idea why prices fluctuate. Additionally, dynamic pricing can make low-income consumers feel less accessible and unequal. For example, the Uber article states there were many complaints when there were huge price spikes due to in-climate weather and driver availability. In addition, many customers feel like businesses inflate their prices in an effort to make money.
I personally experienced something similar on a trip to Isla Mujeres, Mexico. We were aware of currency exchange fluctuations, but we didn’t realize how often the rate would change throughout the day. We checked the rate before leaving our hotel and headed to an exchange, only to find the rate had dropped by 25 cents in the short amount of time it took to travel there, roughly 30 minutes. While this isn’t exactly the same, I think it mirrors and highlights the rapid and unpredictable nature of dynamic pricing. Dynamic pricing mostly involves algorithms, but companies ultimately decide how it works. While dynamic pricing offers potential benefits, companies must acknowledge and address the ethical concerns it raises. Transparency in pricing models, clear communication, and ensuring accessibility for everyone is critical in this data-driven era to maintain trust and positive consumer perception.
After watching the video and reading the article dynamic pricing can have some benefits. In the video, it talked about how after a large event is done, uber prices rise due to the demand for drivers to get more people out to Uber. Dynamic pricing is used when demand is increasing however this can sometimes cause issues. I think there can be a healthy amount of it so the price increases but not too much where the majority of customers think it is an issue and call it unethical.
John DeGraff – MKT 311-22
Dynamic pricing has introduced a new, unique way for businesses to specifically tailor their prices to their customers. Instead of using flat prices for all customers, instead businesses can tailor and market their prices to their individual customers with the hopes of achieving ultimately higher profits and sales. For businesses, this is a win/win situation, where they’re able to profit the most optimally using data collected from customers. From a customer perspective, however, many might be unhappy with the fact that the amount they need to pay to obtain a specific good or service is now variable. When these variables are not sufficiently explained (or in unethical situations, hidden) from the customer there will likely be pushback and customer unhappiness or confusion, damaging customer relationships. Customers will only pay whatever they deep to be of equal perceived value of the good or service, with dynamic pricing businesses can attempt to identify this “maximum” perceived value/amount willing to pay on a per-customer basis rather than based on consensus.
This also may come with some ethical considerations as well. First and foremost I would argue it’s essential that organizations are upfront and transparent with their dynamic pricing and data collection/usage, as demonstrated in the Uber video. When businesses try to use dynamic prices shadily or in secret instead they appear as being predatory, simply preying on their customers to try and milk every penny out of them, damaging the relationship. Without explaining why it would also look extremely unfair to some customers who are being charged higher than others. Transparency is essential towards maintaining customer relationships, if customers are aware of why they may be paying more or less for certain products they’ll be more likely to be understanding. And lastly, if there is no transparency there is the potential for businesses to lie and make up fictitious data or reasons as to why certain goods/services are dynamically priced highly, doing this would be taking advantage of your customers and would be a significant breach in ethics and sustainability.
Marketing 311-22
John DeGraff
Dynamic pricing, as advocated by Greg Petro in his Forbes article, is a strategy where prices for products or services are adjusted in real-time based on demand, supply, and other market factors. Marketers might employ dynamic pricing in various scenarios, such as in online retail, ride-sharing services like Uber, or even in the hospitality industry. By leveraging data analytics and algorithms, companies can optimize their pricing strategies to maximize revenue and efficiency. However, consumers may have ethical concerns about marketers using dynamic pricing. One prominent issue is price discrimination, where different individuals are charged varying prices for the same product or service based on factors like location, browsing history, or even demographic information. This can lead to feelings of unfairness and exploitation among consumers, eroding trust in the company. Additionally, dynamic pricing could potentially create a sense of unpredictability and inconsistency, making it difficult for consumers to plan their purchases effectively. Transparency and fairness in pricing practices are essential to address these concerns and maintain a positive relationship between businesses and consumers
Marketing 311-22
John DeGraff
Before watching the video I didn’t know much on Dynamic pricing. After watching the video i learn that its a tactic used more by marketers by adjusting prices in response to real-time factors like demand and weather. Industries like hotels, airlines, and major e-commerce players such as Amazon are embracing this method. Sporting events, ski resorts, and even services like Uber have also incorporated dynamic pricing. In today’s data-driven era, marketers harness extensive data to optimize profits. However, this approach sparks ethical concerns, emphasizing the importance of transparency and fairness. Consumers may feel unsettled by fluctuating prices, raising worries about potential exploitation and confusion. Greg Petro’s article and the Uber Dynamic Pricing Video highlight these concerns, emphasizing the need for marketers to find a balance between profit goals and maintaining consumer trust. As dynamic pricing shapes modern commerce, navigating these ethical considerations becomes increasingly crucial.
After watching the video I have learned that dynamic pricing is a strategy that companies use that uses changing prices quickly based on the demands and needs of consumers. This includes the demand for the products, how much of the product is available to be purchased, and other factors such as the popularity of a product or service. Dynamic pricing is becoming more popular in certain industries because of the increase in usage and accessibility of technology. Although this is a popular technique amongst businesses, consumers often disagree with this strategy because they feel they are taken advantage of by increasing the costs on certain products that other companies may produce for less. I would agree that the usage of dynamic pricing creates an unfair market for its consumers and can often result in costumes leaving and finding a similar product elsewhere. In my opinion, I think that businesses should be careful about how they choose to use dynamic pricing because consumers won’t feel that they are being cheated and lied to by the businesses they purchase goods from.
Marketing 311-22
John DeGraff
Marketers use dynamic pricing primarily in industries where demand fluctuates significantly, such as airlines, hotels, entertainment (e.g., ticket sales for concerts or sports events), and e-commerce. This pricing strategy adjusts prices in real time based on factors like demand, inventory levels, competitor pricing, and customer behavior.
Ethical concerns from consumers about dynamic pricing mainly revolve around fairness and transparency. Consumers might perceive dynamic pricing as unfair if they believe prices are being manipulated excessively or if similar customers are charged differently for the same product or service without clear reason. There’s also concern over privacy, as dynamic pricing often relies on collecting and analyzing detailed data on individual consumer behavior. Consumers may feel uneasy about how their data is used to determine prices and whether their information is handled respectfully and securely. The opacity of pricing algorithms can worsen these issues, leaving consumers unsure about how prices are set and whether they are treated equitably. Transparency in determining prices and ensuring that personal data is used ethically and responsibly is crucial to addressing these ethical concerns. In the instance of Uber’s dynamic pricing, Uber is very transparent and open with its dynamic pricing strategies, providing customers with the most assurance.
After reading the Forbes blog and watching the Uber dynamic pricing video, I think dynamic pricing can be beneficial for a lot of things. The ethical concern I would have about it is I would be concerned that it would be used solely to get the most possible profit on products and services from consumers. The way that the article talks about supermarket use and the video talking about uber seem to suggest that isn’t the case. As long as dynamic pricing is used not just to raise but to lower pricing when it makes sense in both cases, I think it can be really beneficial for navigating supply and demand. Dynamic pricing can do a good job of making sure everyone’s needs are met, more seats in a stadium are filled, etc. One example from the uber video talks about how they raise prices when demand is high to encourage more drivers to work so that everyone who needs an uber can get one in a timely manner. They will then lower the prices to try to give consumers a good deal, and even have options to be notified when the price drops. Similarly, the article talked about grocery stores sending deals to individuals who frequently buy similar products, encouraging them to consume, while giving them a good deal. As long as the dynamic pricing isn’t just being used to maximize profits, I think it’s beneficial.
MKT-311 22
After reading the article and watching the video for this blog post, I think that dynamic pricing makes sense for things like sporting events and vacations makes sense. The popular games / vacation times people really want to can benefit the businesses, and going to the less popular things can be done for a huge discount. However I am concerned that for the more essential goods and services, dynamic pricing can cause companies to make things much more expensive by overpricing their goods during the premier times. For example, in the news lately i have seen that Wendy’s is going to implement dynamic pricing. My problem with this is that obviously people are going to eat at dinner and lunch time, and not at the less busy times, so Wendy’s is pretty much just more expensive. Raising prices at the times people eat is just raising prices essentially. I only went to Wendy’s because it is cheap so now I probably won’t go anymore.
MKT 311-22
John DeGraff
After reading the article and watching the video for this blog post, the concept of dynamic pricing is much more clear to me, and I believe it can be beneficial for numerous reasons, however it may also raise some ethical concerns which are important to notee. One reason dynamic pricing would be beneficial is as it is an adjustment to the price based on things such as real time demand and competitor pricing. By taking these into account, a specific company could benefit as opposed to a competitor, as they may have a lower price on a good which could drive sales up. One ethical concern might be price gouging. For the consumer end, prices may be raised significantly in times when a good/service is popular, leaving the consumer with possible resentment towards the business. While this can have positive benefits for a company, there could also be possible ethical concerns on the consumer side
MKT 311-22
John DeGraff
After watching the video and reading the assigned article, I believe that dynamic pricing can be a beneficial tool, but only if used thoughtfully and ethically. Marketers may use dynamic pricing in industries that have seasonal fluctuations or limited inventory. Although dynamic pricing can have benefits for certain industries, if not used ethically, it could cause consumers to turn to competitors. One major concern surrounding dynamic pricing is the effect it may have on individuals with limited financial means. When prices rise based on market conditions, it may become challenging for some consumers to afford products. This can cause dissatisfaction among consumers as they may feel taken advantage of for having to pay more than usual. Marketers need to be aware of the impacts of their pricing and implement strategies for lower-income populations.
MKT 311-22
John DeGraff
I learned that dynamic pricing is pricing items and/or services depending on factors such as real time supply and demand fluctuations and data collected from the consumer. Uber uses dynamic pricing by charging more before and after live events occur or when demand excesses supply. I experienced this first-hand when I traveled to London. I decided to take an Uber from Heathrow Airport to my Airbnb. When I first looked for a ride, prices were around £125. So, I waited around for about an hour or so and saw the price drop down to £80. An airline company or online travel agency can use dynamic pricing by charging more to people who visit their site more often to look up prices for their future vacation plans. Consumers can say dynamic pricing can be unfair to those who what to purchase a product or service but cannot due to companies pricing them out.
Marketers use Dynamic Pricing according to what is relevant at the time. Marketers need to consider many different variables. Such as what is currently popular, who they are planning to target, supply and demand, what competitors are in the current market.
Dynamic Pricing will ultimately be a very good money saving strategy. Marketers select their platforms carefully to stay on top of current prices. This will ensure that there are no surprises or losses in the profit margins.
There are the naysayers consumers who feel that often Dynamic Pricing could be seen as unethical. The reasons they put forward are more because they feel that prices can be adjusted in order to fit specific personal data or demographics.
However, at the end of the day people need to understand that for businesses it is all about the bottom line and who is making the most profits. America is well known around the world to have successful businesses and that many come here from far and near to reach financial success.
After reading Greg Pedro’s article on dynamic pricing, as well as watching the Uber dynamic pricing video I understand that dynamic pricing is a strategy where businesses or company adjust their prices of products or services based on demand and customer demographics. Marketers might use dynamic pricing to generate more revenue because of demand changes, inventory alterations, or even seasonal events. Marketers could use dynamic pricing during a time like the Super Bowl by charging more for seats in the stadium because the demand is high. Ethical concerns customers might have about dynamic pricing could be numerous things. The first one is lack of transparency or lack of trust in businesses, this is because, during this method, it seems that the business is doing what benefits them, and not their consumers. Another aspect could be data privacy, considering the prices fluctuate. This means that consumers’ data is being used to revenue of business more money, whether they agree to it or not.
John DeGraff — MKT 311-22
When used logically and ethically, dynamic pricing makes sense for markets that have a high degree of supply risk involved. Hotels, airlines, sporting events, and contracted ride/delivery services, to name a few, have some reasonable case to deploy adaptive pricing models. First and foremost, these are service offerings; predicting demand for services, in some contexts, may be more challenging than doing so for retail products, simply because services often require more commitment and cater less to impulse. Therefore, when a hotel has unsold rooms, it is logical for it to lessen the price as the date of service approaches, in order to fill vacant rooms.
Where dynamic pricing becomes far more unethical and disconcerting is when companies simply choose to do it to maximize profits, not to offload excess inventory or create more supply on short notice. This sort of investor-prioritizing dynamic pricing is, in my opinion, another example of how our economy, which should stand for U.S. citizens collectively, stands for only its most wealthy citizens. It is a result of over-financialization, which pushes firms towards increased share price rather than increased social value in the form of better products/services. This is not to say that investors don’t deserve to benefit from their contributions, simply that there must be ethical balance enforced to prevent the economy from becoming even more biased in favor of firms.
Dynamic pricing is becoming increasingly common, as witnessed in the airline and hotel industries, e-commerce behemoths such as Amazon, and even sporting events and ski resorts. Uber’s revolutionary disruption of the taxi service industry shows the model’s adaptability by accounting for demand, weather, and driver availability. However, the widespread use of dynamic pricing raises ethical concerns among customers. The fundamental issue is transparency, which customers may interpret as pricing manipulation. The shifting nature of prices can erode confidence, with consumers believing they are not receiving fair value. Concerns about discrimination also arise, as demographic or location-based price decisions may disproportionately harm particular groups.
Dynamic pricing is typically used in a market with fluid demand, and can be optimized to create the most possible profit. However, it can also fall victim to corporate greed, however it may play itself out in this case. For example, if a firm hikes prices because demand is higher, this will somewhat drive demand down as the consumer surplus will shrink and drive demand down. However, it is very possible that a company will drive prices up and the rest of the market will match that price, which is one of the dangers of using dynamic pricing. One instance of this is in ticketing for sporting events and concerts. Ticketmaster, a well known ticket selling app, has been under fire for over pricing tickets for concerts and events. The Superbowl also brings the NFL criticism, as the tickets are priced well above what is comfortable for it’s average consumer. In a perfect world, the business world would not require such extensive costs and would make a pricing model that is profitable to all involved in each transaction. However, in a free market, the demand and supply will level out price in the long run, however it can be quite harmful in the short run. Overall, in a free market, dynamic pricing, while it has it’s risks, will always exist unless a fixed price, such as price floors and ceilings, are brought to be standard.
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