Demand Elasticity and Market Segmentation for Innovative Delivery Solutions: A Stated Preference Analysis of Price Sensitivity of Indian Consumers for Traditional and Innovative Delivery Methods

The advent of new services like drone delivery, dark stores, autonomous delivery, and hyperlocal services have resulted in major transformations in delivery in India. They are now offered along with the traditional courier services. The result of such a sudden change is a dynamic and competitive landscape, in which consumer tastes and price-sensitivity vary greatly amongst service types and cohorts of people. This paper is aimed at researching the price elasticity of demand in these delivery channels, to get a better understanding of how customers will react to price changes in the dynamically and diverse Indian delivery market. The research will aim at answering such key research questions as, how the price elasticity of the different delivery services is different between the old and new services, what factors socioeconomic, demographic and behavioral factors influence the segmentation of the Indian delivery market and how the perception of value influences the price elasticity among the different consumer groups.
The primary data was collected using a structured survey, among 255 respondents in India who belonged to various socioeconomic, geographic and demographic variables. To establish key trends in the price sensitivity and consumer decision making in the categories of delivery the statistical methods such as regression analysis, cluster analysis and a market segmentation modeling were used. It is expected that the results of this research are a thorough comparison of difference in elasticity of market segments identified. It will also shed light on the effects of technology flexibility, disposable income and disparities between urban consumer and semi-urban consumer on the responsiveness of the price. The research will also seek to provide a practical information into market segmentation which could inform them in their pricing policies.
The proposed paper is aimed at helping to fill a particular void in scholarly discussion on pricing strategies of logistics services and the responsiveness of consumers. It aims at contributing evidence based contributions to other delivery service providers, as well as policymakers and investors in the fast-paced and innovative delivery service market in India

Demand Elasticity, Market Segmentation, Consumer Price Sensitivity, Drone Delivery, Last-Mile Logistics, Pricing Strategies, Willingness To Pay

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