Dynamic Pricing Strategy AI Prompt

Design a data-driven dynamic pricing framework for this e-commerce business.

Product catalog: {{catalog}}
Demand data: {{demand_data}}
Competitor pricing feed: {{competitor_prices}} (if available)
Objective: {{objective}} (maximize revenue, maximize margin, protect market share)

1. Dynamic pricing applicability:
   Not all products are suitable for dynamic pricing. Score each category:
   - High suitability: commodity products, seasonal products, high price sensitivity, active competitor pricing changes
   - Low suitability: branded products, luxury, items where price stability builds trust

2. Demand-based pricing rules:
   Adjust price based on current demand signals:
   - High demand (sell-through rate > target): small price increase to protect margin
   - Low demand (sell-through rate < target): small price decrease to drive velocity
   - Near out-of-stock: price increase to ration remaining inventory
   - Overstock: price decrease to accelerate sell-through

3. Competitive pricing rules (if competitor data available):
   - Price matching rule: stay within 5% of the lowest verified competitor price for A-category products
   - Price leadership rule: for unique or differentiated products, ignore competitor pricing
   - Floor price: never go below the minimum margin threshold (cost + minimum margin %)

4. Time-based pricing:
   - Day-of-week elasticity: are there purchase patterns that suggest different price sensitivity by day?
   - Seasonal pricing: pre-season vs peak season vs clearance pricing for each category
   - End-of-season markdown schedule: structured markdown cadence as season ends

5. Guardrails and controls:
   - Maximum price change per day: ± 10% to avoid customer perception issues
   - Price floor per SKU: ensures margin is never destroyed
   - Minimum price stability: some products (premium, gift) should not fluctuate frequently
   - Human review threshold: any suggested price change > 20% requires human approval

6. Testing and measurement:
   - A/B test dynamic pricing vs static: randomize products into test and control
   - Measure: revenue per visit, gross margin %, sell-through rate
   - Be aware: customers on the same product may see different prices (manage perception risk)

Return: product category suitability matrix, demand-based and competitive pricing rules, time-based strategy, guardrails, and testing framework.