Dynamic and Fixed Pricing - Research Paper Example

Fixed pricing intends to entice several customers and customers because it presents them with assurances (Turban, King & Lang 121). For instance, a fixed price for a commodity allows the potential client to distinguish the amount they will give before making any contract with the company/ organization. This strategy is also reliable, in that case, clients need to get used to the pricing set by the concerned organization.

In the long run, the management will have reduced the risk of upsetting the clients by changing prices over time (Turban, King & Lang 122). Sales projecting and profit approximations are also easier when one knows his point of price (Turban, King & Lang 122). Turban, King & Lang note that profit maximization is allowed through dynamic pricing (123). If a retailer constantly communicates with the clients on the changes in pricing through this strategy, it is likely to maximize its possible returns.

It also makes it clear out slow stock. Dynamic pricing comprises a significant amount of stock monitoring, with charge bargains in response to increased stock levels. This method tends to remove excess stock fast (Turban, King & Lang 123). However, this approach can lead to client confusion. If charges change continuously, clients can get confused by the state of affairs and be enticed to those retailers using a fixed pricing strategy. Therefore, it can outcome in a deficit in the market. Sudden variations in price can change the demand for commodities, which becomes difficult to map for inventory replacement (Turban, King & Lang 115).

The fixed price setup enables one to develop a last price for his or her product (Turban, King & Lang 123). In this strategy, the consumers can make an immediate buying at a fixed price. One will sell the item instantly without expecting the item to finish. With this setup, qualified retailers can list several amounts of identical items (Turban, King & Lang 123).