DIFFERENTIATED PRICING


PRICE DISCRIMINATION -
when a company sells a product or
services at two or more prices .
DEGREES OF PRICE DISCRIMINATION-

1st Degree
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2nd Degree

3rd Degree-
(a) customer-segment pricing – Different
customer groups pay different prices for the
same product.
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(b) product-form pricing - Big Bazaar sells mens
shirts in many styles, fabrics and levels of quality.
•
(c) Image Pricing – Price the same product at two
different levels based on image differences.
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(d) Channel Pricing – Coca cola carries a different
price depending on consumer purchase.
•
(e) Location Pricing - Same product is priced
differently at different locations .
•
(f) Time Pricing – Prices are varied by season,
day ,or hour.
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For Price Discrimination, Certain Condition Must
Exist -
•
(1)- Market must be segmentable.
•
(2)- Members in the lower price segment must not
resell the product to the higher price segment.
•
(3)- Competitors must be able to undersell the firm
in the higher price segment.
•
(4)- Cost of segmenting & policing the market must
not exceed the extra revenue derived from price
discrimination.
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(5)- Practice must not breed customer resentment
and ill will.
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(6)- Must not be illegal.
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PRICING FOR RURAL MARKETS..
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There are several approaches adopted by
retailers & companies to address the income flow
of rural consumer-
•
(1)- Extending Credit
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(2)- Break the bulk and sell the product in loose
form, often in small quantities
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(3)- Low Units Packing
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(4)- Marketing low priced product
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(5)- Product bundling