Pricing in Consumer Digital Markets: A Dynamic Framework

Australasian Marketing Journal 27 (2019) 139–148

10 Pages Posted: 27 Jun 2019 Last revised: 5 Sep 2019

See all articles by Richard Reisman

Richard Reisman

Teleshuttle Corporation

Adrian Payne

UNSW Australia Business School, School of Marketing

Pennie Frow

The University of Sydney - Discipline of Marketing

Date Written: June 19, 2019

Abstract

Supplier firms are increasingly seeking new ways to personalize their offers and differentiate their products, especially in contested digital markets. One approach that shows promise involves encouraging customers to participate in pricing decisions using schemes such as “pay-what-you-want” where the customer has an input into determining the price. These approaches can benefit both the customer in terms of paying a reasonable price and reducing risk, and the supplier in terms of increasing sales and generating deep customer insights that can assist in relationship development. However, extant research shows limitations associated with these pricing approaches and, despite some qualified successes, there has not been widespread adoption in businesses. This study extends consideration of existing participative pricing schemes and proposes a new conceptual framework, termed FairPay. This framework overcomes many of the limitations of previous approaches, while addressing important challenges, especially those faced by many digital product suppliers. The framework offers an attractive pricing solution for both customers and suppliers, ensuring an equitable exchange that is based on value-in-use. We discuss the application of this framework in the context of digital products, where the approach has special promise.

Keywords: pricing, participative pricing, digital products, pay what you want, FairPay, subscriptions

Suggested Citation

Reisman, Richard and Payne, Adrian and Frow, Pennie, Pricing in Consumer Digital Markets: A Dynamic Framework (June 19, 2019). Australasian Marketing Journal 27 (2019) 139–148, Available at SSRN: https://ssrn.com/abstract=3407567

Richard Reisman (Contact Author)

Teleshuttle Corporation ( email )

20 E 9th St.
New York, NY 10003
United States

Adrian Payne

UNSW Australia Business School, School of Marketing ( email )

Sydney, NSW 2052
Australia

Pennie Frow

The University of Sydney - Discipline of Marketing ( email )

Sydney, New South Wales
Australia

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