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What distinguishes pricing strategies in e-business from those in conventional business?
E-business pricing strategies often offer fixed prices
E-businesses must consider the actions of more competitors when setting prices
Conventional businesses tend to have lower pricing flexibility
E-businesses typically use a cost-plus pricing strategy
The correct answer is: E-businesses must consider the actions of more competitors when setting prices
E-business pricing strategies are distinguished from those in conventional business primarily because e-businesses operate in a highly competitive online environment, which requires them to continuously monitor and react to the actions of numerous competitors. In the digital marketplace, consumers have the ability to easily compare prices across different platforms and sales channels, leading e-businesses to have less control over pricing. This competitive landscape encourages businesses to adopt more dynamic pricing models, adjust prices based on real-time market conditions, and consider factors such as competitor pricing and consumer demand more seriously than traditional businesses might. The nature of e-business allows for immediate adjustments in pricing strategies in response to competitor behavior. Traditional businesses may not have the same level of visibility or urgency regarding competitor pricing due to differences in market structure and customer interaction. This greater exposure and rapid response capability is a key feature that distinguishes e-business pricing strategies, making the ability to consider competitor actions an essential part of the pricing decision-making process.