Price and the marketing environment for electronic information

Abstract

Argues the central role of pricing strategy in determining the future characteristics of the information marketplace. Focuses on three of the four variables in the marketing of electronic databases: product, distribution and price. The fourth variable, promotion, is omitted. Discusses the product variable in terms of the nature of information as a product and its value, consumption, dynamics, life cycle and individuality. Considers the distribution variable in terms of three potential distribution channels: CD-ROMs; data networks; and facsimile transmission; noting that many producers are still involved in printed products. Discusses the price variable by considering five key approaches to pricing and charging: optimal pricing; pricing according to value; pricing for full cost recovery; marginal cost pricing; and free distribution of services. Analyses the pricing structures for online searching of external databases (subscription charges, discount plans, volume purchase plans, connect time charges, display and print charges, telecommunications charges, session rates, charges for special commands, and charges for special services such as SDI, statistical reports and end-user services). Presents a similar analysis for CD-ROM databases. Concludes that the complex and chaotic information marketplace may be alleviated by standardization in pricing structures for products such as CD-ROMs and research which seeks to link the factors that influence pricing structures to a more closely defined model.