Assignment 2 Internet Marketing

Amazon.com is currently positioning itself as an everyday low price leader. Select five different products offered on Amazon, then use the Internet to compare Amazon’s prices with competitor prices. Does Amazon always offer the lowest price? After conducting this research, do you believe that Amazon is truly an everyday low price leader?


1
PRODUCT Adidas-Originals shoes-Italia-Training-White
AMAZON $43.99
eBAY $47.99

2
PRODUCT Blackberry-8320-Titanium -handphone
AMAZON $273.26
eBAY $249.99

3
PRODUCT Sony Cyber-shot DSC-W230 12 MP- Digital Camera
AMAZON $129.99
eBAY $149.99

4
PRODUCT Safari-Book-Display furniture
AMAZON $51.88
eBAY $52.92

5
PRODUCT Household Handbook by Editors of Southwater-books
AMAZON $1.94
eBAY $2.99

6
PRODUCT Harry Potter and the Deathly Hallows -books
AMAZON $10.19
eBAY $10.00

From this research, I can see that Amazon not always offer the lowest price.

I believe that most product Amazon give lower price to the customer but not all for the product. Certain product still expensive and exceed the competitors price. For example, for digital camera and books, Amazon sells this product with a high price than competitor price. So I believe that Amazon is truly an everyday low price leader for almost products but not all products.

Price discrimination involves a firm selling the same or similar product to different customer segments at different prices. Many different customer segments are interested in purchasing most products. Given each segment has a different demand structure; it is often profit maximizing to set different prices for each segment. The two important characteristics of a price discrimination strategy are as follow:-

>It must be difficult, or not worth it, for customers who receive the product at the lower price to resell product to the customers who are paying higher prices.

>It should be easy to distinguish members of one segment from members of another. If it is difficult to identify customers in different segments, it will be difficult to charge them different prices.