Week 10 Discussion 1
This is the method of applying different pricing on the same product to different types of consumers, usually judged by the amount they can pay. It also focuses on showcasing high priced goods to customers who are more willing to pay. Price discrimination done based on religion, gender, race or nationality is illegal. Despite the fact that it is legal, it has both positive and negative implications. The moral implication of price discrimination is that consumers have lost trust on companies of their private information. Some companies take advantage of this by being dishonest in pricing. calls for a far greater passive client who feels certified to mention sure to everything, to indulge within the pleasures of massive shopping, and take pride inside the gratification of that impulse as much as inside the element bought, which more and more turns into a trifling alibi for luxuriating in the retail international, in which flattery and delusion combo and emerge as greater salient to us. Purchasing turns into a break out from warfare (Ozer et.al, 2012).
Price discrimination is used by industries as a tactic of increasing revenue. Through price discrimination, a business can convert a loss to a profit. The pricing strategy also aims at benefiting consumers by increasing their alternatives of goods and services to choose from. Stakeholders turn consumer surplus into profit. In other terms, it is a tactic of surviving in business. A monopoly may take advantage of economies of scale thus reducing average costs on the long run. Increased revenues can help stakeholders invest more and thus result in company expansion. However, predatory pricing can be financed by profits made from price discrimination (Stole, 2007).
Response to Tenita Jackson
Hi Tenita, based on your discussion on ethical issues of pricing, I fully agree with you on your say on investors who use ethical pricing strategies. However, the strategies that they use should be in accordance to the law which is not similar to your point of view. I also believe that bid rigging is a no no based on the argument that some companies practice it unfairly and end up manipulating the process. Anyway, good work.
Özer, Ö., & Zheng, Y. (2012). Behavioral issues in pricing management.
Stole, L. A. (2007). Price discrimination and competition. Handbook of industrial organization, 3, 2221-2299.