Setting pricing at competitive levels is difficult, because the pricing information on the Internet is suspect. Technology vendor Profitero is looking to change that by using analytics to gather pricing information that marketers can count on.
Deciding pricing is often guesswork based on unreliable information. That's especially true on the Internet, where merchants set imaginary, low prices as part of bait-and-switch tactics. This can leave the customer with a perception about the fair price of a product that defies actual market realities. A marketer can respond by lowering pricing -- but that leads to uncomfortable questions from the chief financial officer about what happened to the profit margins.
Given that pricing information on the Web is generally suspect, what’s required is a more sophisticated approach to capturing, not only pricing data, but also correlating that information with product availability. To address that specific issue, Profitero has come up with a new approach to gathering pricing and availability information that allows marketers to scrape the screens of various Websites and then aggregate all that information in a way that makes it easier to analyze.
Profitero CTO Dmitry Vysotski says the company’s service is designed to allow companies to gather high-quality pricing information in real-time to make more reliable decisions about pricing. The service is also designed to pierce through the veil of packaging options that marketers use to hide their products from consumer price comparison engines.
As the winner of the annual global IBM Basecamp competition for startups that leverage IBM technologies, Profitero currently operates in Europe out of its Dublin headquarters. But Vysotski says the company plans to extend its service into the US in 2012 via a variety of business partnerships. (IBM sponsors The CMO Site.)
There’s no shortage of Web pricing engines. There is, however, a shortage of pricing information that's reliable. Marketers need to understand what is really happening in terms of competitive product pricing. As part of a larger campaign to get businesses to rely more on facts than on intuition, IBM has been making a case for the expanded use of advanced analytics. The degree to which businesses embrace that concept remains to be seen. But if the marketing department is truly going to become a sales engine, it needs to start by finding ways to gather competitive information that is actually reliable.
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— Mike Vizard is a veteran technology journalist.