Consumer Response to Dynamic Pricing in E-commerce
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- NGN 5000
Background of the study
Dynamic pricing in e-commerce involves the adjustment of prices in real time based on factors such as demand, inventory levels, and competitor pricing. This strategy is increasingly prevalent in online retail, where advanced algorithms enable brands to optimize prices continuously (Adeniyi, 2023). Consumer response to dynamic pricing is mixed; while some shoppers appreciate the potential for lower prices, others may perceive frequent price changes as unfair or manipulative. Research indicates that dynamic pricing can enhance sales and revenue if consumers view it as a reflection of market efficiency, yet excessive volatility can undermine trust and satisfaction (Chukwu, 2024). This study explores how consumers respond to dynamic pricing in e-commerce, focusing on the factors that drive acceptance or resistance. By analyzing consumer surveys, pricing data, and behavioral metrics, the research aims to identify key determinants of consumer attitudes towards dynamic pricing and develop strategies to mitigate negative perceptions while maximizing revenue potential (Okeke, 2025).
Statement of the problem
Dynamic pricing, although beneficial for revenue optimization, may lead to consumer dissatisfaction when perceived as unpredictable or unfair. Variability in online prices can generate negative consumer responses and erode trust in the brand. There is limited empirical research that examines the specific factors influencing consumer acceptance of dynamic pricing in e-commerce, leaving a gap in strategic pricing practices. This study addresses this problem by investigating how dynamic pricing affects consumer response and identifying measures to improve transparency and fairness in pricing (Ibrahim, 2023).
Objectives of the Study
To assess consumer response to dynamic pricing in e-commerce.
To identify key factors that influence acceptance of dynamic pricing.
To recommend strategies for mitigating negative perceptions.
Research questions
How do consumers respond to dynamic pricing?
What factors drive acceptance or resistance?
Which strategies can improve consumer trust in dynamic pricing?
Significance of the Study
This study is significant as it examines the impact of dynamic pricing on consumer response in e-commerce, providing insights for online retailers to refine their pricing strategies. The findings will help mitigate negative perceptions and foster consumer trust, ultimately driving better sales performance (Olu, 2024).
Scope and Limitations of the Study
The study is limited to the e-commerce sector and focuses on consumer response to dynamic pricing. It does not extend to traditional retail or all geographical regions.
Definitions of Terms
Dynamic Pricing: Real-time adjustment of product prices based on market factors.
Consumer Response: The reactions and behaviors of consumers to pricing strategies.
E-commerce: The buying and selling of goods via online platforms.
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