Price Discrimination
Price discrimination: A pricing strategy that charges customers different prices for the same product or service.
Price discrimination can occur if a company recognizes the two types of consumers, creates different values for each type, and attempts to take advantage of the two types. Price discrimination is a pricing strategy that charges customers different prices for the same product or service.
For example, a product is sold for $10 to high-value consumers and $7 to low-value consumers. Once consumers become aware of the discrimination, high-value consumers may pose as low-value consumers to beat the price discrimination. The issue of how to identify low- and high-value consumers is serious for every form of price discrimination.
