Price Discrimination Business & Marketing Essay Research (Essay Sample)

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Price discrimination
There are many strategies companies and individuals are using to drive sales. Price discrimination refers to a selling strategy that charges customers different prices for the same services or products basing their action on what they believe a seller can make a buyer agree to. Price discrimination gives the seller a chance to charge a customer the highest price they can settle on. The seller in this strategy, therefore, places customers in different units and charge them differently. There is also the incident of first-degree discrimination, the company charges the highest possible price for every unit consumed. In the second degree discrimination involves the giving of discounts and offers after-sales service for things bought in bulk, and lastly, third-degree discrimination entails different prices for different consumer groups.
To understand more on price discrimination, it is paramount to observe the seller having the ability to charge different prices to different groups basing on demographies and the value they have on the product in question. Discrimination is valued mostly when the profit that is earned as a result of separating the markets is greater than the one of keeping the markets together.