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Author Topic: Low-price sales? It's probably price discrimination  (Read 948 times)

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« on: August 20, 2017, 06:04 »
0
A common technique in business to maximise profits (and therefore, your commissions too).

http://www.investopedia.com/terms/p/price_discrimination.asp


Noedelhap

  • www.colincramm.com

« Reply #1 on: August 20, 2017, 07:03 »
+2
Although the word 'discrimination' implies a negative aspect, it's very common and in most cases understandable. Especially second-degree (quantity discounts) and third-degree price discrimination (different prices for different consumer groups).

Example: of course you're not going to charge an individual hobbyist programmer the same price for your software product than you would a multi-million dollar corporation. Simply because the product is is much more valuable (even indispensable) to a corporation.
When you offer a quantity discount, you're rewarding the consumer for his loyalty (and because of scalability, it reduces your own costs). Nothing wrong with that either.

Quote
"Consumers buying airline tickets several months in advance typically pay less than consumers purchasing at the last minute. When demand for a particular flight is high, airlines raise the prices of available tickets. In contrast, when tickets for a flight are not selling well, the airline reduces the cost of available tickets."


In this case it's simply a matter of supply and demand.

Quote
"Airline passengers typically pay more for additional leg room as well."

That's just paying for extra service or comfort.

« Reply #2 on: August 20, 2017, 11:24 »
+1
What's the discount for something that never really had an established value to begin with?

« Reply #3 on: August 20, 2017, 18:34 »
0
What's the discount for something that never really had an established value to begin with?

Whatever the different segments of the market will bear.

« Reply #4 on: August 21, 2017, 09:40 »
+1
What's the discount for something that never really had an established value to begin with?

Whatever the different segments of the market will bear.

I wish that was happening.

« Reply #5 on: August 21, 2017, 10:18 »
0
What's the discount for something that never really had an established value to begin with?


There is no such thing as an "established" value! That's a Marxist fallacy. "Value" or price is something the offer and demand mechanism is constantly defining and re-defining in a healthy economy.

Just think about how much you are willing to pay for a glass of water in a modern city (zero dollars is a good guess) and how much you would be ready to pay for it, when you are about to die of thirst in a desert?
Or how much it costs the seller to provide you that glass of water in a modern city versus the same glass provided to you in a desert.
« Last Edit: August 21, 2017, 10:26 by Zero Talent »

« Reply #6 on: August 21, 2017, 11:08 »
+1
"Value" or price is something the offer and demand mechanism is constantly defining and re-defining in a healthy economy.

That's not happening either anymore. :D

« Reply #7 on: August 21, 2017, 16:24 »
+1

There is no such thing as an "established" value! That's a Marxist fallacy. "Value" or price is something the offer and demand mechanism is constantly defining and re-defining in a healthy economy.


Ironically, Karl Marx agrees with you.

https://www.marxists.org/archive/marx/works/1847/wage-labour/ch03.htm

"By what is the price of a commodity determined? By the competition between buyers and sellers, by the relation of the demand to the supply, of the call to the offer."

Karl Marx, Wage Labour and Capital

« Last Edit: August 21, 2017, 16:31 by niktol »


 

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