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The contemporary innovation provides a procedure and system that enables sellers to communicate restrictive bids to prospective buyers. Such provisions incorporate prices, which depend on the collective quantity of goods that online buyers aggregately agree to purchase within a given period. This innovation smoothes the progress of demand aggregation and allows marketers to opportunely offer Demand-Based Pricing. Demand-Based Pricing involves prices which fall as the amount of units sold in any given offer escalates.

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The marketer is therefore able to offer volume discounts to purchasers acting as a group, even though the customers may not have any prescribed affiliation with one another. This paper explores into the application of pricing policy in the internet marketing. It endevors to establish the effects of pricing policy adopted by the e-marketer in managing and influencing the online customers, managing their expectations and influencing their behaviors in relation to purchasing decisions.

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The extent to which online markets have expanded globally still poses a new challenge to an old problem- the problem of attaching the price that meets the customers’ expectations. The online marketer is faced with the stiffest competition than ever given that clients and prospects can be reached easily around the world through web marketing and internet marketing among other forms of online marketing.

The greatest achievement a marketer would have is to ganner full product loyalty of the customer. This does not just come by itself but rather, the producer has to look into several issues in order to develop the best strategy, (Fabio Ancarani 2002).

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