ASSINGMENT 2

Assignment 2

Question

Amazon.com is currently positioning itself as an everyday low price. Select five products offered on Amazon, then use the internet to compare Amazon’s price with competitor’s price. Does Amazon always offer the lowest price? After conducting this research, do you believe that Amazon is truly an everyday low price leader?

Everyday low price is define as Pricing strategy that promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping; also called value pricing. EDLP saves retailers the time and expense of periodic price markdowns, saves manufacturers the cost of distributing and processing coupons, and is believed to generate shopper loyalty. A manufacturer's successful EDLP wholesale pricing strategy may reduce volatility in production and shipping quantities and decrease the number of time-degraded product units that consumers receive.

In my opinion Amazon.com always offered the lowest price compare to their competitor’s in pricing strategy, which is everyday low price. While conducting the research I use EBay as the competitor to the Amazon.com. Below is the list of the product’s price:

1) Kindler

Amazon.com = $ 299

EBay.com =$ 319.98

2) Samsung LN32B460 32-Inch 720p LCD HDTV

Amazon.com =$393.00

EBay.com = $499.99

3) Canon PIXMA MX860 Wireless All-In-One Photo Printer

Amazon.com =$125.00

EBay.com =$ 189.00

4) NIKON COOLPIX L11 6.0MP 3X ZOOM DIGITAL CAMERA AS IS

Amazon.com = $189.00

EBay.com =$ 218.80

5) Zune HD 16 GB Video MP3 Player (Black)

Amazon.com = $ 219.99

EBay.com = $ 269.99

With the example, we can accept that amazon.com is the web which is offered everyday low price. There are two key to keep in mind when implementing everyday low price strategy, must find a way to communicate the benefits to consumer and anticipate the lag time between the launch of the strategy and consumer figuring out how to in cooperate EDLP into their shopping routine. Amazon.com is one of the early movers in e-commerce. Because of this there have the competitive advantage.