Saturday, September 15, 2018

Strategy of Pricing: Price Discrimination


Price discrimination
Price discrimination is a pricing strategy which charges different price to different customer for same product.
There are three types of price discrimination – 1. Perfect Price Discrimination 2. Market/ Segment Based Price Discrimination and 3. Price Discrimination by self-selection.
Perfect Price Discrimination
In Perfect Price Discrimination, seller can charge reservation price from customer. Reservation price is the maximum price, which customer willing to pay. At reservation price consumer surplus is 0.
Example: Auction is an example of Perfect price discrimination.
Market/Segment Based Price Discrimination
This type of price discrimination is created for targeting a particular segment. In this price discrimination, different price is charged for different group or segment.
Example: Bus passes for student, Discount in train ticket for senior citizen etc.
Price Discrimination by Self Selection
In this price discrimination, each and every customer can move from one market to another market, having different price for different market.
Example: Citizens of USA buy remedy from Canada because the price of remedy in Canada is lower than USA.

By at
Labels: ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

IMPACT OF SOCIETY /SOCIAL GROUPS ON PURCHASE INTENTIONS OF HOME BUYING- Consumers are the most important factor that will make any bus...

  • Supply in elasticity
    Supply in elastic:if the supply is difficult to replace the product by a substitute goods then that is known as supply-in-elastic. Example...
  • NO PROFIT WITHOUT MARKET STRUCTURE
    MARKET STRUCTURE: there are different market structures that can be characterized to an economy, without market structure any company ca...
  • Supply Elasticity
    If the supply is easy to replace by multiple suppliers then it’s known as supply elasticity. Any unskilled worker is an example of supply e...