With the advent of big data analytics, online prices can now be tailor made for each individual or a group of individuals exhibiting similar characteristics such as taste, preferences, income etc. With the availability of more and more reliable information about the willingness and ability to pay of the existing and prospective customers, the sellers are able to classify them into more refined groups. This highly customised pricing technique is popularly termed as personalised pricing. With the current pace of technological progress, although it is technically possible to estimate the willingness to pay of a consumer in real time, whether the short term increase in revenue of a firm offsets the risk of losing a loyal customer base in the long run is questionable. Personalised pricing helps the sellers squeeze consumer surplus to the maximum possible extent.
Given the benefits of personalised pricing to the revenue management of the firms, our study aims to figure out consumer reaction towards this novel pricing strategy which would help the firms streamline their business tactics and execute the technique more effectively.
Victor, Vijay, "Personalised pricing" (2022). Management Collection. 2.