E-commerce Companies’ Strategy Choices For Big Data-Based Price Discrimination

With the development of Internet technology and the arrival of the era of big data,Big data has become an irresistible trend of the times,Various countries and companies are chasing this trend.Actually,Big data has become a technology double-edged sword,It also brings a series of problems while promoting technological development and innovation,bringing great convenience to people’s lives.Such as consumer privacy issues,information disclosure issues,One of the problems is that companies use big data for price discrimination.In the era of big data,business models and marketing strategies have changed,e-commerce companies need to make strategic choice for big data-based price discrimination.This paper mainly studies the issue of whether the big data-based price discrimination behavior of e-commerce enterprises can be effectively implemented and e-commerce enterprises how to make strategic choices.This paper demonstrates from aspects of consumers and enterprises.The big data-based price discrimination in this paper is essentially a price discrimination behavior,the implementation of price discrimination requires specific conditions.This paper uses the Hotelling model to analyze the strategy choice of e-commerce enterprises for big data-based price discrimination,and use case to analyze.The innovation of this paper is,Previous studies on the impact of consumer traits on purchasing decisions have mostly examined the direct impact of multiple characteristics of consumers on purchasing decisions,this paper studies the impact of consumer information sensitivity on purchase decisions.Previous studies on big data-based price discrimination of companies mostly assumed a monopolistic market structure,in respect of reality,the monopolistic market structure does not conform to the actual situation.So this article uses the Hotelling model to study the situation of two companies.The shortcoming of this article is,big data has only emerged and developed in recent years,big data-based price discrimination is a phenomenon that has just been known to the public recently.So there are not enough data available for research,this makes this article lack the support of data,this is a shortcoming of this article.The main conclusions of this paper are as follows:From the consumer perspective,consumers can be divided into information-sensitive consumers and information-insensitive consumers.Even the big data-based price discrimination behavior of e-commerce companies is very secretly.In the short term,companies can earn more profits through this behavior,but those consumers who are sensitive to information can still know the big data-based price discrimination behavior of enterprises,and disseminate this information to other consumers,Will damage the reputation of the company,reduce the trust of consumers,and decrease the sales of goods.In the long run,it is harmful to the operation and development of enterprises.From the company perspective,this paper uses the Hotelling model and assumes that companies can use big data-based price discrimination strategy or can also use personalized marketing strategy.Reached the following conclusion:When the both companies implement a big data-based price discrimination strategy,companies that reduce the additional utility losses to consumers will earn higher profits.When the both companies implement personalized marketing strategy,companies that increase the additional utility to consumers will receive higher profits.When one of the two companies implements a big data-based price discrimination strategy and another company implements a personalized marketing strategy,in order to obtain higher profits,company that implements big data-based price discrimination strategy need to reduce the additional utility losses it brings to consumers,but company that implements personalized marketing strategy need to increase their extra utility to consumers.Therefore,for e-commerce companies,take advantage of consumer information,analyze consumer preferences,implement accurate product recommendations,and constantly meet the individual needs of consumers is more helpful to the development of enterprises.