Consumer price discrimination of this type involves including the cost of delivery ( absorb-the-freight ) in the price of the product. In addition, these costs may be inflated for customers who live at different distances from the manufacturing location or warehouse.
"Kill-the-rival" . The company significantly reduces the price, down to the level where it becomes lower than the volume of costs. But this only happens in the local market where there is a competitor that needs to be ousted. In the early 20th century, the American Tobacco Company sold some brands of chewing and smoking tobacco at very low prices, as it had the goal of depriving other companies of profit.
"Dump-the-surplus." If the volume of production is higher than the demand for the product, the surplus is sold on the foreign market at a low cost, so as not to reduce monopoly prices within the country.
"Get-the-most-from-each-region" . In importance of lawyer database areas where there is no serious competition, high prices can be maintained. And vice versa - the greater the competition, the lower the cost level. Thus, in the 1970s, the greatly differing prices for bananas in the member countries of the European Common Market attracted the attention of the antitrust authorities of these countries.
How to achieve multiple growth in traffic and sales from your website?
Alexey Boyarkin
Dmitry Svistunov
Head of SEO and Development
Read more posts on my personal blog:
I have always been concerned about the issue of moving to a fundamentally new level. So that the indicators would grow not by 2 or 3 times, but by several orders of magnitude. From a thousand visits to ten thousand or from ten thousand to a hundred thousand, if we are talking about a website, for example.
And I know that such leaps are always the result of painstaking work in five areas:
Technical condition of the site.
SEO.
Collection of site semantics.
Creating useful content.
Working on conversion.
And at the same time, every manager needs an increase in sales and the number of applications from the site at the moment.
To get this growth, download our step-by-step template for increasing sales from the site:
Download template
Already downloaded
153345
Product discrimination
"Appeal-to-the-classes." If there is no significant difference in costs, but the prices of similar products are different, this may be due to differences in their quality. Let's say the costs of producing hardcover and paperback books are completely different. But the discrepancy in their prices in the market significantly exceeds the difference in their printing costs. Cadillacs are much more expensive than Oldsmobiles and Chevrolets of similar size and technical equipment.
"Make-them-pay-for-the-label." A number of products are priced significantly higher than their counterparts solely because of the brand's popularity. We see this in a variety of retail environments, from food products in supermarkets to luxury handbags in boutiques.
"Clear-the-stock" . Manufacturers try to sell off stockpiles and increase sales volumes by attracting customers with more attractive prices. This could be a seasonal discount or regular discounts throughout the year.
Transport and equipment in the warehouse
Source: unsplash.com
"Switch-them-to-off-peak-times." During periods when consumers traditionally buy less, companies lower prices to increase sales and ensure more even use of retail capacity. For example, telephone companies charge more favorable rates for long-distance calls on specific days, times, or even seasons.
"Bundle-the-outputs." Combining different products or services into one set to increase and maintain sales. Some products are not in high demand, but consumers buy them together with other, more popular ones. For example, buying a season ticket to a concert hall for the whole year gives you a more comfortable seat in the hall. And before the performances of the stars, less attractive performers are included in the program.