Dynamic pricing is an act of selling products for different prices based on some background data. Different pricing may be offered based on:
- The group. Different people may see different prices based on their demographics. It is prohibited by law in many countries.
- The time. Dynamic pricing based on time is widely popular in the transport industry. For example, it is believed cheaper to buy plane tickets in advance and at night.
- The market condition. If there are any shifts on the market, they may find their immediate response in the product price.
- The peak pricing. When the product is very popular, its price rises. For example, apartments near the sea become more expensive during the summer.
- The penetration pricing. The product is cheaper when the company enters the market and goes up corresponding to how long they stay.
In advertising, impressions have dynamic pricing. For example, it is more expensive to advertise on certain websites or during a certain time on social media or TV. It is also more expensive to advertise the product during the high season when competitors are more likely to fight till the last client.
