Priced to sell! The impending decline of price as the determining factor in Internet commerce

Internet Research

ISSN: 1066-2243

Article publication date: 1 August 2000


Schwartz, D.G. (2000), "Priced to sell! The impending decline of price as the determining factor in Internet commerce", Internet Research, Vol. 10 No. 3.



Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited

Priced to sell! The impending decline of price as the determining factor in Internet commerce

Priced to sell! The impending decline of price as the determining factor in Internet commerce

Claims of a level playing field leading to price-based competition on the Internet are quickly fading from memory. As the complexities of Internet markets and the new technologies used to attack those markets develop, a new range of competitive considerations is emerging. This issue of Internet Research presents a number of initiatives that explore and analyze the nature of selling online.

Mass customization has been touted as one of the new holy grails of Internet marketing, but as Jiang argues in "Segment-based mass customization: an exploration of new conceptual marketing framework", taking mass customization to the level of one-to-one is not necessarily beneficial. Reaching a market segment efficiently and profitably is determined by whether the mass customization is based on an optimal segment size that does not, in general, correspond to an individual consumer. Jiang investigates the factors that effect optimal segment size, including the market situation and company resources.

The use of shopping bots is perhaps the antithesis of mass customization in that using current bot technology, comparisons can only be made based on standard product offerings across multiple vendors. In "Product searching with shopping bots", Rowley reviews the search facilities offered by shopping bots in the context of an experiment to purchase books online. The search facilities of shopping bots were investigated using trial searches for three different best-selling books. As Rowley shows, the effectiveness of bots does not only depend upon search facilities but also depends on product coverage, and other added value features such as publisher and consumer reviews.

What type of functionality can we then expect from a shopping bot in pursuit of a mass customized product? Perhaps the next generation of shopping bots will in fact incorporate the theories proposed by Jiang and set the stage for Rowley's next analysis.

The effectiveness of any tool or technique to increase the success of Internet sales needs to consider far more than just optimum segment size and useful bot searching. Vijayasarathy and Jones, whose work has appeared previously in Internet Research, return with "Print and Internet catalog shopping: assessing attitudes and intentions". Increasing our understanding of consumer behavior is paramount to developing the next generation of e-marketing technologies and their paper moves us forward in that direction. Vijayasarathy and Jones' empirical study compares individuals' attitudes and intentions to shop using print and Internet catalogs. Their findings suggest that individuals perceived differences between the two catalog media on the shopping factors of reliability, tangibility, and consumer risk.

This issue of Internet Research also includes two papers that investigate Internet security and interactive news media.

Internet-related security issues have become the subject of our daily news headlines but perhaps unjustifiably so. In "Internet-based security incidents and the potential for false alarms", Evans and Furnell present a study that shows a marked lack of uniformity when it comes to identifying and classifying Internet security breaches. In an experiment that began by sampling over 700,000 IP addresses, only two sites considered the activity to be an attempt to breach their security. Evans and Furnell elaborate on the security challenges faced by organizations, and show how a lack of proper understanding of Internet security issues leads to mismanagement of harmless incidents and conversely, the potential to mismanage serious security breaches.

Among the major effects the Internet is having on our society, are changes in the production and consumption of news media. The dimensions of interactivity afforded by Internet-based news reporting take us into unchartered territory with challenges heretofore unseen in traditional radio, television, and print. Massey, in his study of "Market-based predictors of interactivity at Southeast Asian online newspapers", tracks the interactive characteristics of 17 English-language Asian newspapers, considering both market-based and press-freedom variables. By taking a multidimensional look at interactivity characteristics, Massey gives us a glimpse into the future evolution of online newspapers.

Continuing the study of pricing change brought about by the Internet, the case study presented in this issue follows the development of software pricing models looking at three different software providers. Bontis and Chung discuss the development of software pricing models and the move toward Application Service Provider (ASP) delivery of software. They show that while pricing structure must be aligned with value realization, the facilitation of business objectives overshadows pricing considerations.

On the Internet priced to sell is clearly no longer enough.

David G. Schwartz