The Behavioral Economics in Marketing’s Podcast Price Discrimination | Definition Minute | Behavioral Economics in Marketing Podcast
Jan 3, 2023
Quick definitions and real-world examples of charging different prices to different buyers. Airline fare strategies and timing-based pricing are highlighted. Targeted discounts and coupon tactics get a concise breakdown. The three main types of price discrimination are introduced in simple terms.
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When Price Discrimination Works
- Price discrimination charges different customers different prices for the same product based on factors like demographics or willingness to pay.
- Its success depends on whether splitting markets raises profit and on differing demand elasticities.
Compare Segment Profits Before Splitting Markets
- Employ price discrimination only if segmented-market profit exceeds combined-market profit.
- Evaluate relative demand elasticities to judge its efficacy and longevity.
Airlines And Coupons As Real Examples
- Airlines price identical seats differently by purchase timing, channel, and rewards status to capture varied willingness to pay.
- Coupons segment customers by price sensitivity, letting some pay less while others pay full price.