Expected impact of Artificial Intelligence on Pricing

Abstract

THE AIMS OF THE PAPER

Technology and tools of Artificial Intelligence (AI) will disseminate in more and more business areas in the near future, including marketing and pricing. Our aim is to present how data driven techniques will impact on pricing and change the pricing practices of enterprises.

METHODOLOGY

In this conceptual study I analyzed the expected impact of AI methods, based on the detailed research I carried out earlier. My study inspects the most important process steps of pricing.

MOST IMPORTANT RESULTS

I prove in my research that data driven technologies supported by AI tools will bring fundamental changes in pricing in the next decade. I developed a potential AI-based process of establishing optimal prices. I offer a proposal to expand the one dimensional price of a product into three dimensions including time and customer. 

RECOMMENDATIONS

Value-based and dynamic pricing will spread widely due to AI. Reservation price, price elasticity, and optimal price are those theoretical concepts that will gain practical relevance with the usage of AI: all companies will be able to calculate those values by which profit can be increased significantly.