Dynamic Pricing in Online Business. What Pricing Strategy Should Be Used in Digital Business?

40% of German companies vary their prices dynamically on the internet. This strategic tool helps them to exploit the consumer's maximum willingness to pay. Studies confirm that these companies are able to reach higher profits through dynamic pricing. But the federal ministry of consumer protection sees the price transparency for consumers at risk.
This publication shows how new and existing customers react to dynamic pricing techniques. It examines if regular customers have a different price fairness perception than new customers.
Customers often react with dissatisfaction and complaining when they notice a disadvantage due to dynamic pricing. Their dissatisfaction can have a long-term impact on the buyer-seller relationship as well as the company's reputation and profits. Therefore, price fairness perception is crucial for dynamic pricing strategies.
Keywords:
- Dynamic Pricing;
- Status-based Dynamic Pricing;
- Consumer Dissatisfaction;
- Price Transparency;
- New Customers;
- Regular Customers