timer Asked: Apr 18th, 2020

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Continue working on your literature review attached

Write the data analysis section.

Add to the references section as needed.

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Running Head: CONFIDANT PRICING STRATEGY The Confidant Pricing Strategy Model for Online Stores Abdullah Alshawi Alliant International University 1 CONFIDANT PRICING STRATEGY 1 The Confidant Pricing Strategy Model for Online Stores Literature Review The confidant pricing strategy is a new model for setting a price on different products in online stores and is a way to change the traditional thoughts and views on the interactions that various parties have. Its core foundation is customer behavior while purchasing, and how different factors influence them as they make the purchases. Even though it is not highly developed by itself, its core functions are in use, and it now boils down to placing an understanding of the different factors affecting consumer behavior. The online stores have specific market target goals, and therefore have to leverage this effectively if they are to gain any meaningful results. Understanding consumer dynamics is an essential aspect of online sales, and as such, there should be a consideration of how the different parties interact with each other. This literature review will focus on the dynamics of customers engaging in online shopping, their concerns when making purchases, how to effectively target them and offering quality control standards such as rating system to spark consumer interest and investment. Currently, there are different strategies in use, but they overall assume the position of understanding that is not unique to online stores. The internet has specific dispensations that render any traditional pricing strategies obsolete. The focus should be on establishing the confidant pricing model as the perfect remedy for online sales since it entails a detailed analysis of how the previous customers feel about their products and the consequent loyalty that they show in their interactions with each other. CONFIDANT PRICING STRATEGY 2 Confidant pricing for online stores primarily focuses on assessing the spending behavior of consumers on the online platform and understanding their preferences, then strategically pricing the commodities based on their level of preference by the customers in a strategic manner that retains the customer base and keeps them purchasing the products or commodities. Online stores therefore collect sensitive information to acquire essential knowledge regarding their customers’ needs and preferences, then using this knowledge to apply the confidant pricing technique and attract more sales. Sensitive information such as online consumer interactions, age and gender of the customer base, and their preferences can be collected from online consumer reviews, which can then be used to inform the pricing strategy. Online customer reviews have a great influence on online sales as well as the purchasing decisions of customers. The rapid increase in the use of internet worldwide has resulted in more consumers using ecommerce and online shopping platforms to purchase products and services, leaving reviews for different products based on their satisfaction with the products’ quality. Most consumers choose the types of products to purchase based on the recommendations from other online consumers and the reviews they gather from other online customers, and these reviews are the most important factor in product selection decisions. Several studies have proven that online customer reviews have a significant effect on online sales. While some studies show that the review valence affects future sales, others focus primarily on how these reviews affect pricing. According to Von Helversen et al., (2018), the valence and volume of online customer reviews are important in determining the purchasing decisions of customers as well as the pricing of products and commodities. The study they conducted revealed that more positive online reviews increase the sales and improve the attitudes of the customers towards the products, while negative reviews have negative impacts on the purchasing decisions and reduces overall sales. Even though CONFIDANT PRICING STRATEGY 3 they claim that both positive and negative reviews have an impact on the overall sales, additional research has indicated that negative impacts have more significant impacts on the purchasing decisions of customers or the sales volume than positive reviews. Öğüt & Onur Taş (2012), revealed that negative reviews carry more weight and have the strongest effect on customer attitudes and purchasing behavior since they discourage customers from purchasing the poorly reviewed products than positive reviews convince customers to purchase the positively reviewed products or commodities. However, more research have revealed that the negativity bias is often limited to hedonic goods or products and not the products that fall under the category of consumer basic needs. The reaction of consumers to positive and negative online reviews is further influenced by the age of the consumers. More specifically, there are average online reviews that review an entire category or overall quality of products, and single reviews that entail personal overviews of specific products. According to Law & Ng (2016), average online reviews are the most important types of reviews for online consumers. Regardless of whether it is presented in statistical or narrative form, average reviews resonate more with online customers than single reviews. When it comes to age, the purchasing decisions of younger adults is often strongly influenced by average consumer ratings than older adults. This statistic raises the question as to how the different consumer reviews affect the pricing strategies of online stores. According to a study carried out by De Maeyer (2012), found that even though online reviews influence the purchasing decisions of customers, the degree of that impact depends on several other factors, with the main one being the price of the products or commodities. Regardless of the positivity or negativity of the online reviews, customers are often swayed by the prices of the products. This is why online stores come up with different pricing strategies, with the CONFIDANT PRICING STRATEGY 4 main one being confidant pricing. It involves tailoring the pricing strategy to the needs and preferences of customers and making them feel valued to the extent that the significance they attach to the prices of the products diminishes significantly in the face of the quality and positive reviews of the products. However, online customer reviews often lose their importance when the prices of the products do not consider the income levels of the customers. Floyd et al., (2014) conducted a study that analyzed consumer purchasing behavior when taking their income levels into consideration, as related to products of commodities with positive online reviews. Consumers with low income levels were found to first consider the prices of the products before considering the reviews. Regardless of whether the products receive positive or negative reviews, the prices of the products will always have a stronger influence on customers with low income levels than online reviews. For customers with high income levels, online reviews are more important in influencing customers’ purchasing behavior than the prices of the products. Confidant pricing strategies often yield better results in increasing sales volumes for online stores by making the customers feel greatly valued and tailoring the prices around their needs, preferences, online reviews, and levels of income. Methodology The methodology will entail constructing a database based upon several approaches that will help in identifying different studies that pertain to consumer purchasing behavior and different ways in which online reviews influence sales and pricing. Relevant articles relating to the overall effects of consumer online reviews on purchasing power will be included in the database to inform the study and provide the necessary information regarding consumer behavior and how it is CONFIDANT PRICING STRATEGY 5 influenced by the prices of products, their income levels, online product reviews, and other factors such as the age of the consumer. A manual search will be conducted on leading journals relating to online pricing strategies and consumer dynamics that influence them. Some of the journals will include the Journal of Product & Brand Management, Journal of Retailing, Journal of Global Scholars of Marketing Science, and The Service Industries Journal among others. Data Collection The data collection process will entail exploring the websites of online shopping stores such as Amazon and eBay to explore the different customer reviews on different products, and then assess the impacts of these reviews on the sales of those products. These are two of the most popular online shopping stores in which most customers shop on a daily basis, posting several reviews and influencing the purchasing behavior of other consumers on the online websites. They will therefore include some of the most important product reviews whose impacts can be associated with the sales volumes of specific products on the online platforms or websites. The main data collection tool that will be used in mining essential consumer data is a Web Product Surveys. Product surveys will entail the use of online chats in the form of questionnaires post or pre-chat using open ended or closed ended questions to collect customer information and receive essential feedback in real time. This instrument helps in building more connections with customers and informing the online stores’ way forward by moving forward after receiving positive feedback, or identifying the blind spots or weak spots and inform the improvement of service provision or product quality. In addition to the pre and post-chat questionnaires, a live chat survey will also be used to collect real time feedback that will help in easily understanding the perspectives of the customers and the different factors that influence their purchasing decisions. CONFIDANT PRICING STRATEGY 6 References Camilleri, M. (2017). Market Segmentation, Targeting and Positioning. doi:10.1007/978-3-31949849-2_4 De Maeyer, P. (2012). Impact of online consumer reviews on sales and price strategies: a review and directions for future research. Journal of Product & Brand Management, 21(2), 132139. doi:10.1108/10610421211215599 Dhaigude, A., & Tapar, A. V. (2015). Examining Role of Perceived Customer Value in Online Shopping. Online Information Review, 14(2). Retrieved from ustomer_Value_in_Online_Shopping Floyd, K., Freling, R., Alhoqail, S., Cho, H. Y., & Freling, T. (2014). How Online Product Reviews Affect Retail Sales: A Meta-analysis. Journal of Retailing, 90(2), 217-232. doi:10.1016/j.jretai.2014.04.004 Katawetawaraks, C., & Wang, C. L. (2011). Online Shopper Behavior: Influences of Online Shopping Decision. Asian Journal of Business Research, 1(2). doi:10.14707/ajbr.110012 Kocas, C., & Akkan, C. (2016). How Trending Status and Online Ratings Affect Prices of Homogeneous Products. International Journal of Electronic Commerce, 20(3), 384-407. doi:10.1080/10864415.2016.1121765 Law, M., & Ng, M. (2016). Age and gender differences: Understanding mature online users with the online purchase intention model. Journal of Global Scholars of Marketing Science, 26(3), 248-269. doi:10.1080/21639159.2016.1174540 CONFIDANT PRICING STRATEGY 7 Senbabaoglu, E. (2017). The Impact of the Service Innovativeness on Perceived Overall Service Quality, Customer Loyalty and Perceived Customer Value in Shopping Sites. Marketing and Branding Research, 4(4), 371-383. doi:10.33844/mbr.2017.60438 Sharthi, R., & Karraiah, D. (2015). Consumers’ Perception on Online Shopping. Journal of Marketing and Consumer Research. Retrieved from 20on%20Online%20Shopping.pdf Von Helversen, B., Abramczuk, K., Kopeć, W., & Nielek, R. (2018). Influence of consumer reviews on online purchasing decisions in older and younger adults. Decision Support Systems, 113, 1-10. doi:10.1016/j.dss.2018.05.006 Öğüt, H., & Onur Taş, B. K. (2012). The influence of internet customer reviews on the online sales and prices in hotel industry. The Service Industries Journal, 32(2), 197-214. doi:10.1080/02642069.2010.529436 CONFIDANT PRICING STRATEGY 8 Appendix A: Web Product Survey Is this your first time using this product? o Yes o No If not, how long have you used this product? o Less than one month o One to six months o Six months to one year o One to two years o More than two years How often do you use this product? o Not so often o Every day o A few times a week How did you learn about this product? o From an online review o A different source Was the information positive or negative? How did the nature of the information influence your decision? Where do you often buy this product? o Online store CONFIDANT PRICING STRATEGY o A physical location Overall, how satisfied are you with this product? o Very dissatisfied o Dissatisfied o Satisfied o Very satisfied 9 ...
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