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Pricing strategies in online & offline retailing

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The thesis deals with pricing strategies for multichannel retailers, especially traditional stores which additionally manage an online shop. The problem of integrating two sales channels and applying a well-suited pricing strategy is still an emergent question. This work develops a stochastic model to represent consumer behavior on pricing. On the one hand the model contains two probability functions which render consumers' reservation prices for each individual channel. On the other hand the stochastic model is based on numerous distributions which represent switching probabilities from and to each separate channel. The various distribution functions will be estimated from the results of a survey. To highlight differences of pricing strategies due to several product categories a cross comparisons of books, clothes and digital cameras will be presented. The results show that there are differences in multichannel pricing of the various products. These inequalities stem from consumers' perceptions of the sales channels. For each product a separate sales channel is preferred by consumers. Therefore, one channel exhibits some advantage versus the alternative channels. This advantage is reflected in different pricing strategies. Further appropriate marketing strategies could help a firm to counter discounting by its competitors. So firms should keep an eye on the reservation price structure of its consumers as well as their demanded marketing activities. (author's abstract)

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Gottfried Gruber

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