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Pricing Issues on the Internet

One of the easiest places to see the impact of the Internet on marketing is by looking at its effect on pricing decisions and consumer's perceptions of prices. Since its inception, the World Wide Web (WWW) has developed the reputation as being the place to shop to get the lowest prices.

- Why has this reputation developed?
- Why might it be possible to charge lower prices online?
- Are products really cheaper?

To answer this last question, choose two products and find them for sale online (books, CD's, and software work very well). Calculate the total price that would be charged to your credit card, then go to a "brick and mortar" retailer and find prices for the same product there. Make your comparisons.

- Where is the cheapest place to buy the products that you have selected?
- What costs go into determining which place you buy your product?
- Are there any non-financial costs to shopping online? To off-line shopping?