12/30/03
NOW IT'S OFFICIAL: Strong market
positioning means price-setting power in online sales. That's the word
from an April 2003 study on the effects that price changes had on the
online book sales of rivals Amazon.com and Barnesandnoble.com.
The study's authors, economics professors Austan Goolsbee of the
University of Chicago Graduate School of Business and Judith Chevalier
of the Yale School of Management, collected data in 2001 using
publicly available price and sales ranking data on both sites.
They found that Amazon.com's position of market dominance meant it
could charge higher prices for books. A one percent price increase
reduced sales by 0.5 percent at Amazon.com, but the same percentage
price hike at bn.com cut sales by 4 percent, the study found.
"One can only think that if you lack any brand identity, that
it's even worse. That if you raise your prices just a small amount,
you lose a tremendous amount of business, and it suggests that a guy
without a brand identity faces a pretty tough situation in the online
environment," Goolsbee says.
SOURCE: CIO.com
|
.gif){kind=logo}
