Discussion Responses Unit 2
Veronica Bowens Brown
(1)
1 Like
Jami, I really enjoyed reading your post this week. I totally agree with you with prices for different airline vary. The hidden fees is something to pay close attention to as well. Some will do a price match. While other run random sales. In most cases the marketer wants the customer to feel as if they are getting a better deal. Supply in demand is one way of looking at it.
Microsoft and Netflix will do anything almost to stay on top. They offer a great verity to keep their members happy. The rules and regulations have changed a bit over the year. They are trying to stop people from sharing accounts now a days but, still remain a winner. Your examples were awesome thank you for sharing with the class. Be Blessed
Veronica Bowens Brown
Stephanie Babineau
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UNIT 2 – DISCUSSION BOARD
Fri 3/29/2024 11:53 PMLikeUnit 2 – Discussion Board Like PostFlagUnit 2 – Discussion Board Flag Post
Hello, everyone! Hope all are well and good!
Pricing discrimination is a technique that companies may utilize to charge different prices to different customers, for the same product or service. There are three listed types of pricing discrimination. First, is the first-degree, (or, perfect) price discrimination method. This instance involves assessing each consumer’s personal demand choice, while, charging each individual the highest price that the single consumer is willing to pay, figuratively, for a unit. This results in the firm, making the highest profit, per customer, as is willing to purchase separate units.
2nd-degree price discrimination will reduce average prices, while, the number of the select products purchased, are increased. This type of price discrimination will only work if the products or services that the consumer is willing to purchase, will be in multiples, during a specified period. This style of price discrimination may be in two forms, one being, 2nd-part pricing, in which, the prices will decline, depending on the amount that is purchased. In this mode of pricing, this form of 2nd-degree pricing discrimination, occurs, with the charge for purchasers, as a fixed access charge, for them to purchase the number of units, as they decide, for the pricing constant fee, created per unit. Another 2nd-degree pricing discrimination application is declining block pricing, which, is offers, discounts for purchases made in quantity, and the freedom to buy more, being there is no single uniform price, stated. In this opportunity, any consumers may face the same pricing options, and, customers who buy more units, will pay lower prices, for pricing blocks of the select product.
A 3rd degree of price discrimination involves the application of firms, when they are able to do, both, recognize while separating 2 or more groups, or, submarkets, of customers. A different price is assigned to each submarket, for the same product purchases. An example of this happens when hair products are sold in sets, or, separately. One customer may favor a single-bottle purchase. Another customer may select a set of the same products, while, paying a third less, for the set, in comparison. With these purchases, complementing one another, each customer retains some of the consumer surplus and the advantages of each, positive purchase.
And, an example of first-degree pricing discrimination, may be observed, when the pharmacy charges the highest prices that the client is willing to pay for their medication. This may also make being able to afford one’s prescribed medications, a desperate negative outcome, due to unfair pricing practices.
REFERENCES:
Thomas, Christopher R., & Maurice, S. Charles. (2020). “Managerial Economics: Foundations of Business Analysis and Strategy”, pp. 589, 593, and 604. McGraw-Hill.
Emma Colquitt
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UNIT 2 – DISCUSSION BOARD
Thu 3/28/2024 3:48 PMLikeUnit 2 – Discussion Board Like PostFlagUnit 2 – Discussion Board Flag Post
Hello class,
Price discrimination is a common strategy used in various industries, such as the airline industry, the arts and entertainment industry, and the pharmaceutical industry (Twin, 2024). It involves selling the same product to different consumer segments at various prices. For example, airlines may charge lower prices for tickets purchased several months in advance and higher prices for last-minute purchases (Twin, 2024). Movie theaters also practice price discrimination by offering different ticket prices for seniors, students, and children and having matinee pricing for early shows.
There are three degrees of price discrimination. First-degree price discrimination involves charging customers the maximum price they are willing to pay. Second-degree price discrimination involves offering discounts for buying in bulk, while third-degree price discrimination involves charging different prices to different consumer groups (Twin, 2024).
This strategy maximizes revenue by capturing consumer surplus from different population segments, as other groups typically have different price sensitivities. By segmenting consumers and tailoring prices accordingly, firms can increase their overall revenue and profitability. Additionally, firms use information about price elasticity to predict how consumers will respond to changes in price (Twin, 2024). If a segment is highly price-sensitive, the firm may offer discounts to attract more sales, while for less price-sensitive segments, the firm may increase prices without losing many customers.
Twin, A. (2024, February 27). What is price discrimination, and how does it work?. Investopedia. https://www.investopedia.com/terms/p/price_discrim…
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