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Behavioral Pricing: Smart or Scary?

SodaHead News 2012/01/23 22:57:44
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It's a few weeks into 2012, and businesses are trying to zero in on the year's big trends. According to The Daily Mail, Alex Gannett, founder of CampusSplash, says this will be "the year of behavioral pricing." That means companies could start using Twitter and Facebook to analyze how much people would be willing to pay for their product, sort of like customized Internet cookies. In other words, you could inadvertently raise the price of something by 'liking' it on Facebook.

Chris Simpson, Chief Marketing Officer at price comparison website Kelkoo, warns that it could have even darker implications, like different price adjustments for different people. He explains, "There are many pricing policies already used by retailers that most consumers are completely unaware of. These include things like regional pricing variations in the same stores across the country, not to mention retailers using different pricing structures for the same products in stores and online."

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  • Beat Magnum True Hero 2012/01/24 05:54:45
    Smart
    Beat Magnum True Hero
    +13
    News Flash:

    Businesses have been doing this ever since we went from the barter system to a monetary system... it's called MARKET RESEARCH! This is just using new technology to do a very old thing. Businesses have played this old game for years: how much can we sell this product for in this economy? The internet gives them a new tool.

    Put your little conspiracy theories away and quit being so easily scared already.

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  • Minarchist 2012/01/26 06:17:28 (edited)
    Smart
    Minarchist
    +1
    I believe in the free market system and this sounds good to make prices regular from state to state some things to consider:
    1) The populous in major cites would unkowingly predict a higher price, thus driving the price in smaller states higher due to smaller states having lower population and lower wages.
    2) This could eliminate many regulations from government and bring higher wages and lower cost (a possible counteraction to #1)?
    3) This would also fix wallstreet problems and have a stable market.


    Essentially, this has more pluses than minuses in my book. Though I may not have realized all things.
  • LAAD Gunner - USMC 2012/01/26 05:36:33
    Smart
    LAAD Gunner - USMC
    +4
    I agree with Joey, it's called market research guys. There will always be new methods and tools for it, this is one of them. To be honest any business that did NOT do this would be foolish.
  • Mellissa 2012/01/26 05:00:36
  • MyPaperBleedsInk 2012/01/26 04:30:59
    Scary
    MyPaperBleedsInk
    +3
    Smart for the companies, scary for the rest of us. there are a heck of a lot of people that over pay for things and don't know what items are worth. Kind of like soda sold in stores. 20 oz? 1.60 or so..... 1 L? 99 cents..... 2 L? 1.20...... major price differences when it comes to amount, and yet people still buy the 20 oz bottles. Ridiculous.
  • ur XLNC-PWCM 2012/01/26 03:11:32
    Scary
    ur XLNC-PWCM
    +3
    Way back in the last century, you may recall, the price of tickets got raised 'astronomically'. The reason for this was the entertainment industry; i.e. movies, sports, concerts, etc. noticed that scalpers were cleaning up on scalping tickets. They decided that the scalpers were getting money that should be going into their OWN pockets. So we can thank the RABID fans of all stripes that were and still are willing to pay exorbitant prices to be entertained. THIS smacks of the same thing. We have TOO MANY people that don't think or consider the consequences of THEIR actions!
  • Steve Boston 2012/01/26 03:09:24
    Smart
    Steve Boston
    +1
    Smart move by corporate America. They know they have a willing Techno-bot generation that will give it all up online. Our Techno-bot gen is so easily programmable.
  • edifyguy 2012/01/26 02:46:16
    Smart
    edifyguy
    +1
    I remember a businessman in Virginia told me this: "If someone is willing to pay a certain price for something, you're a fool to charge less." It has some truth to it.
  • diarslade 2012/01/26 01:45:52
    Scary
    diarslade
    +1
    Scary...but it is smart I'll give them that. Market research in general is a scary thing, but I can't blame companies for trying to get an accurate picture about supply and demand.
  • GLaDOS 2012/01/26 01:43:51
    Scary
    GLaDOS
    +1
    But, smart as well. But DAMN scary.
  • Greg 2012/01/26 00:51:53
    Smart
    Greg
    +1
    Interesting.
  • bob h. 2012/01/26 00:03:19
    Scary
    bob h.
    +1
    What's scary is that anybody think this is something new. Do they shop in another country?
  • Karl Marx 2012/01/25 23:47:55
    Scary
    Karl Marx
  • Khristian Gillespie 2012/01/25 22:59:59
    Smart
    Khristian Gillespie
    +1
    If get lisen to people like and dislile the iteam they should pricing fair then.
  • ETWolverine 2012/01/25 22:03:35
    Smart
    ETWolverine
    +1
    What the article fails to mention is the just as you might inadvertantly raise the price of a product by "liking" it, you might lower prices by NOT liking it. Sounds like the ultimate in market-force-based or demand-based pricing to me. If companies can detemine the real market value of their product based on behavior pricing, it will assure that the market reacts all that much quicker to the desires of the consumer. That is a good thing. It will eliminate unwanted products from the market. It will make sure that both QUALITY and PRICE are at the best place for the CONSUMER based on the demand for that product. It will help set production standards and production quotas that are reasonable for demand levels (thus eliminating the costs of too much inventory). It will effectively HELP the economy work more efficiently.
  • ruthannhausman 2012/01/25 21:41:46
    Scary
    ruthannhausman
    +1
    The scary part is when you don't stop and think about this for a minute. The Internet is actually going to assist the consumer in the long run. Products are "discovered" or developed and put on the market. The pricing is usually based on a decent profit margin after consideration of the actual cost to make the goods. But fads do come into play. Remember the Pet Rock? The great thing about the free market is that there is always going to be competition and the laws of supply and demand. And with the Internet, getting to the cheapest suppliers is going to be easier. Likewise, information on product fraud, etc., will get to the consumers faster. There are always going to be people who milk a good thing for all it's worth but, in the long run, the excessive profits peter out.
  • 001 2012/01/25 20:28:04
    Scary
    001
    +1
    If I had to I would pay $10 for a loaf of bread, but if it would come to that I think I'd have to steal half the time in order to survive.
  • John Storz 2012/01/25 19:40:21
    Smart
    John Storz
    How is this any different than any other form of market research? This might even lead to prices lowering quicker...
  • topgundy7 2012/01/25 19:16:20
    Smart
    topgundy7
    Sounds like another version of market analysis to me. Wise up you scaredy cats!
  • iamco2000 2012/01/25 19:02:19
    Smart
    iamco2000
    +1
    HOLY COW BATMAN, Wait until they find out about data mining! You mean, going out to consumers.....the people who buy things.....to find out how much they'd pay.....to find out what other companies charge....to find a mid-point cost lever.....whoa.....the business world will never be the....oh, wait, I forgot, this IS a capitalist country...oh *head slap* that's how free-trade commodity sales works...guess someone failed economics.
  • bob h. iamco2000 2012/01/26 00:06:38
    bob h.
    Lemme think...oh yeah; dollar stores.
  • iamco2000 bob h. 2012/01/26 03:20:59
    iamco2000
    They have their place, and even though most things are around a buck not everything is, sometimes lower, sometimes a little higher....still pretty funny though.
  • wildthang 2012/01/25 18:40:18
    Scary
    wildthang
    +2
    Because we worship supply and demand they get more clever in pricing according to desparation so it can sense what people absolutely have to have and price it to the upper limit and they wont have enough money to buy anything else... that destroys the marketplace by destroying peoples capability to buy. It like a pricleine if they can determine your willingness to pay they can instantly price it just for you and some will be paying more and some les for exactly the same thing... a reverse form of communism of from each according to their need to the seller according to their greed.
  • 001 wildthang 2012/01/25 20:29:20
    001
    It also helps destroying the original idea of capitalism (which has already been failing for as long as we're alive anyway)
  • pitchergrl1 2012/01/25 18:40:04
    Scary
    pitchergrl1
    +2
    that is so stupid! just cause we like it doesn't mean you need to up the price. money seems to be the only thing people care about anymore
  • bob h. pitcher... 2012/01/26 00:08:06
    bob h.
    Yeah, I really like Lincolns. Let me know when they hit $99.95
  • Lizzyloo 2012/01/25 18:02:57
    Scary
    Lizzyloo
    +1
    Big Brother is watching...EVERYTHING!
  • John Storz Lizzyloo 2012/01/25 19:42:28
    John Storz
    ... you think they weren't ALREADY watching everything?
  • merlin 2012/01/25 17:49:15 (edited)
    Scary
    merlin
    +1
    The only thing people care about on face book is. Is if Mafia Wars or other games by Zynga are working Correctly and their getting their points and kills;-]]] LOL
    P.S Business's should sell their product at a fair price! Every body wants to get rich over-nite these days! and can care less about the consumer;-]
  • william keegan 2012/01/25 15:10:36
    Scary
    william keegan
    +1
    Although businesses are free to use whatever marketing schemes they want, this innovation seems to be a bit over the top. It will result in the bastardizing of the 'supply and demand' model and would appear to be anti capitalistic, thus introducing a loss of freedom to the purchasing public.
  • susan 2012/01/25 15:04:49
    Smart
    susan
    Interesting, ad it might work in certain areas and for certain products. However, it can also tarnish a company's reputation so badly that they would lose big.
  • bob h. susan 2012/01/26 00:11:50
    bob h.
    What's to tarnish; most of the big respected American names, sold out to China years ago. Even something as "taken for granted" as Kodak film is Chinese.
  • Bill G53 ~PWCM~JLA 2012/01/25 13:20:50
    Scary
    Bill G53  ~PWCM~JLA
    +1
    I find the price display gadgets a little more scary than other things mentioned. If the computer detects a surge in some item selling, it sends out a command and the price automatically ticks up before you even get to the register
  • Patric 2012/01/25 13:10:18
    Smart
    Patric
    seems like there are a lot of nervious nelly's in this group..

    so much about they will raise prices..

    well, they will lower prices just as often , if not more, seeing all the negitive feedback on this...

    free enterprise at work..

    more demand and less supply... higher price

    less demand and over supply... lower price..

    unless you are the US Gov't .. then all the rules of free enterprise gets thrown out the window , and the socialism rules the day... eg. USPS , or how about gov't run tranist authority , public housing , etc.....
  • richwright 2012/01/25 11:44:13
    Scary
    richwright
    +2
    Big brother is watching you! Vote for Pugs and loosen the regulations for even more personal intrusion.
  • aneed2know 2012/01/25 08:26:15
    Scary
    aneed2know
    +1
    This is why i dont have any information about me on any social networking site, and why i am here on SH for nuttiness.
  • JGF 2012/01/25 08:14:22
    Smart
    JGF
    +1
    For years my business had behavioral pricing - the worse you behaved, the more I charged.
  • Lizzyloo JGF 2012/01/25 18:05:17
    Lizzyloo
    +3
    Funny!
  • Semyaza's Lachrimae 2012/01/25 07:55:44
    Scary
    Semyaza's Lachrimae
    +1
    But they already do something similar, this is just a lot more scary
  • ryan.noh1 2012/01/25 07:36:37
    Smart
    ryan.noh1
    Whether you like it or not, it is smart, it is business savvy. I sure don't like being charged more for things I want because other people like them too, but hey that's how the world works xD.
  • greg 2012/01/25 07:22:38
    Scary
    greg
    +2
    that's why i try not to rate anything on facebook, companies troll for information

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