Setting Prices

PRICE DISCRIMINATION:

       price discrimination is a concept where customer is charged different prices for different units of goods bought or different consumers are charged differently for the same product or price. It is not because of cost of supply. Same product or service is sold at various prices in price discrimination.

     It is divided into three types 1) Perfect Price Discrimination

                                                   2) Market / segment Based price Discrimination

                                                   3) Price Discrimination by self selection

     

   Price discrimination is based on these concepts:- 1) Auctions

                                                                                  2) Age based discounts 

                                                                                  3) Social Reservations

                                                                                  4) Economic Reservation

                                                                                  5) Coupons and cashbacks 

Examples for price discrimination:- 

  1) Train Tickets - Prices of the train tickets will be different for normal people and senior citizens. Under senior citizens category they get discount on ticket price.

2) Shopping - sometimes shopping malls offer different kinds of discounts. If we shop for more they give coupons and cash backs accordingly. We can use those coupons later to get discount on price.