PRICE DISCRIMINATION:
Price discrimination means a single consumer may be charged different prices for different units of a good bought or different consumers may be charged different prices for the same product / service.
Selling a good at different prices to different customers is called price discrimination.
The maximum price that consumer willing to pay is CONSUMER RESERVATION PRICE.
There are 3 degrees of price discrimination. They are:
1. PERFECT PRICE DISCRIMINATION:
Identify and appropriate the consumer reservation price and charge accordingly. It is a ideal case. In this case each individual is different. In perfect price discrimination the dream comes true. Perfect price discrimination happens in B2B organisation.
Example : Auctions
2. PRICE DISCRIMINATION BY SELF SELECTION:
Basically it is most common. Some how the consumer reveal the price and the producers make them reveal some far in case of price discrimination by self selection.
Example : Multiplex theaters ticket price, Train ticket rates etc.
3. MARKET OR SEGMENT BASED PRICE DISCRIMINATION :
There are different segments and the price is different for different people depends upon the segments. There are well defined segments and the mobility of segments is NOT POSSIBLE. i.e., it is not possible for moving from one segment to another segment.
Example : Price of U.S. text books in India , Reservations for backward people, Bus pass for students etc.
Price discrimination means a single consumer may be charged different prices for different units of a good bought or different consumers may be charged different prices for the same product / service.
Selling a good at different prices to different customers is called price discrimination.
The maximum price that consumer willing to pay is CONSUMER RESERVATION PRICE.
There are 3 degrees of price discrimination. They are:
1. PERFECT PRICE DISCRIMINATION:
Identify and appropriate the consumer reservation price and charge accordingly. It is a ideal case. In this case each individual is different. In perfect price discrimination the dream comes true. Perfect price discrimination happens in B2B organisation.
Example : Auctions
2. PRICE DISCRIMINATION BY SELF SELECTION:
Basically it is most common. Some how the consumer reveal the price and the producers make them reveal some far in case of price discrimination by self selection.
Example : Multiplex theaters ticket price, Train ticket rates etc.
3. MARKET OR SEGMENT BASED PRICE DISCRIMINATION :
There are different segments and the price is different for different people depends upon the segments. There are well defined segments and the mobility of segments is NOT POSSIBLE. i.e., it is not possible for moving from one segment to another segment.
Example : Price of U.S. text books in India , Reservations for backward people, Bus pass for students etc.
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