A Christchurch-based firm is set to launch a groundbreaking internet-based interactive pricing mechanism.
My-Price will unveil its Java-based product, which shares the company’s name, within the next few weeks.
The interactive system, which uses the internet and can transmit data over mobile phones using a WAP signal, is aimed at companies selling “distressed” goods. These include items like empty airline seats, hotel beds and hire cars. The system, developed by Christchurch-based Bootstrap IT, is also suitable for items like whiteware, which might have seasonal fluctuations in sales.
My-Price head David Post says a manufacturer can adjust prices to smooth out sales peaks and troughs, while also finding extra sales, keeping inventories down and stabilising production. Those with high fixed costs and low marginal costs, where an extra sale greatly boosts profits, will see most benefit, he says.
Post says existing discounting systems, such as fixed price sales or reverse auctions, affect the main selling market. He believes they are bad for firms as people wait until the last minute before buying. There is also no negotiation. Instead, My-Price offers a time parameter and flexible prices.
For example, if someone wanted to travel to Australia for any of the next 10 weekends, they would key in the details and “using an algorithm, the system spits out a price”, says Post. If a suitable option is available, the traveller can buy on the spot using a credit card or have the amount billed to their phone account if they are using a WAP phone.
Post says My-Price has no customers to date, but he is confident of finding clients within a month.
The former manager Lufthansa manager came up with the idea while working overseas and has filed for a patent (No 513253, filed in August of 2001). He formed his company at the end of 2000 with chairman Bryan Gould, the Waikato University vice-chancellor.
My-Price has been talking to two airlines about adopting the service, plus New Zealand hotel groups, a camping van and car rental company. Post says he is going to the UK to talk to hotel groups about the service. “They can attach it to their website. It’s very robust and transparent.”
Post calls the software the “Holy Grail of marketing” because of the sales data it captures.
“You can tell when people start getting interested in something, which is better than questionnaires and focus groups.”