Editors: Özalp Özer and Robert Phillips
This chapter focuses on the use of mathematical analysis by which a seller can set and update the prices for a finite set of pricing segments. The idea of using mathematical analysis to optimize
prices in this fashion is relatively new. Several authors such as Friedman (1956), Gates (1967) and Morin and Clough (1969) describe models in which price is the only criterion used to select
a supplier. Talus Solutions was the first company to develop a software system to optimize customized prices (Boyd, et. al., 2005). The first detailed treatment of an optimization approach to
customized pricing for segmented markets is Chapter 11 in Phillips (2005). Agrawal and Ferguson (2007) apply a similar analytical approach to two examples of what they call customised-pricing bid-response models (CPBRMs) and compare the performance of segmented and unsegmented approaches. Phillips (2008) describes the application of optimal customized pricing in the specific context of consumer credit pricing.
Source: Oxford Handbook of Pricing Management
Phillips, Robert. "Customized Pricing." In Oxford Handbook of Pricing Management. Ed. Özalp Özer and Robert Phillips. New York: Oxford University Press, 2012.
Place: New York