Dynamic pricing using e-coupons

Abstract

Coupons have been used extensively in the brick and mortar industries like airlines, hotels along with the retail stores, etc. as a means to dynamic pricing by price discrimination. This is often done using discounts in the form of coupons. The electronic world is more suitable for this kind of approach due to the huge information base available with merchants. This paper primarily deals with devising some ways of determining customer groups and the coupon discount values for these groups by solving an optimisation problem. Various experiments were performed to validate the solution obtained and compared with existing ones.