Price discrimination and its species

Price discrimination is a special campaign to sell products a large group of consumers, based on their personal abilities.Often it is used under conditions of imperfect competition and involves the sale of a particular product at different prices.

This concept was developed by the French economic actors Dupuis.He's still in the 19th century a clear distinction between the population into three main categories: the poor, the rich and wealthy.Thus, he decided to demonstrate that people have different capacities, respectively production of too high prices can not afford poor categories of citizens.But as every craftsman and every enterprise seeks to maximize profits, it is necessary to resort to a flexible pricing system.

In today's market-price discrimination allows organizations to significantly increase the number of customers and thus improve the standard of living of the population.For example, certain categories of citizens can not buy this product at a set price, but do not mind buying it at a lower cost.It turns out that the company covers the production costs and receives a minimum percentage of the profits, but the quality increases sales.

Of course, not all companies have the ability to easily adjust the pricing on the market.As a rule, the proposed method is appropriate for those firms that managed to take a strong position in the market and can affect market conditions.Price discrimination requires additional expenses for market research, consumer audience, and opportunities of the company.That is before to differentiate prices for the goods, it is necessary to carry out a deep market research and plan everything carefully.

Price discrimination and its species.

Scientists divide the concept into three main types:

- the first kind;

- the second;

- third.

Price discrimination of the first kind is a more theoretical view, as in practice almost never used.It is based on the will of the seller, that is, it determines, at what price to sell the goods to a particular user.There are a few oriental markets where you can still find such an open relationship.In general terms, according to this principle are consultants expensive stores, private tutoring.

discrimination most frequently used of the second kind.In this case the pricing depends on the volume of purchases.A striking example is the cost of goods when purchasing wholesale and retail, as the difference between these values ​​is essential.

Price discrimination of the third kind is based on the differentiation of prices depending on the social category.Many shops and businesses develop and produce a variety of discount cards, conduct promotions and sales.For example, in theaters allocate a special day in which students can purchase a ticket at a substantial discount.

Experienced marketers arbitrarily differentiate customers on the potential and significant.This concept is particularly acute in the manufacture of high-value goods or services such as information technology.Of course, the acquisition of large-scale technological systems is quite expensive and is designed for long-term use.However, progress is not in place, there are various upgrades punctually.Large companies can afford to raise prices to update the system, and thereby reduces them to new customers.

Thus, price discrimination - is a powerful tool to improve the performance indicators of the enterprise.In addition, it is worth noting the improvement of living standards.