What is Price Discrimination in Marketing?

Learn Price Discrimination definition in marketing with explanation to study “What is Price Discrimination”. Study price discrimination explanation with marketing terms to review marketing course for online MBA programs.

Price Discrimination Definition

  • A company sells a product or service at two or more prices that do not reflect a proportional difference in costs.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



Price Discrimination Explanation

Value separation is a selling methodology that charges clients various costs for a similar item or administration, in view of what the dealer supposes they can get the client to consent to. In unadulterated value segregation, the merchant charges every client the most extreme value the individual in question will pay. In increasingly regular types of cost segregation, the dealer places clients in gatherings dependent on specific qualities and charges each gathering an alternate cost. Value segregation is polished dependent on the vendor's conviction that clients in specific gatherings can be approached to pay pretty much dependent on specific microeconomics or on how they esteem the item or administration being referred to. Value segregation is most important when the benefit that is earned because of isolating the business sectors is more prominent than the benefit that is earned because of keeping the business sectors consolidated. Regardless of whether value segregation works and for to what extent the different gatherings are happy to pay various costs for a similar item relies upon the overall versatility of interest in the sub-markets.

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