Thursday, February 10, 2011

Price discrimination

There is good and there is also bad in using price discrimination for boosting sales. Why did I say so?

People use price discrimination method to attract certain group of people just to boost their revenues. However, does that mean it is going to be useful always? The answer is “NO”! Price discrimination is not gonna work every time. Definitely no! Sometimes, the outcomes are just not gonna be as perfect as what we are expecting. That is life. The true, cruel life…

Before going any further, do you know what is price discrimination? Well, I bet you ever heard of airlines offering cheaper air fares for senior citizens and children, and cinemas giving a special low or rather cheaper price to the ladies on ladies night (which commonly called). Now, that is what I called price discrimination. Various prices are set for different group of consumers for the same type of products or services that has the same cost of structure.

Obviously, different prices are not set mainly towards people but also set according to time and places too. That is why you have all the variety in price according to the seating in the cinemas for instance. There are no cost differences to the cinemas, neither to the concerts nor football match. What is concerned here is the location where consumers see, watch and enjoy. Meanwhile, peak periods are what affecting the price charges of time based industries. Hotels, airlines and telecommunication companies are so into this trend.

Talking about peak and off peak, that reminds me of the accountants’ job. Huh, back to price discrimination! Like what I have informed of, there should be less or no competitors at all in the market if price discrimination is to be used. Furthermore, it should be cost less to the segment in using discrimination strategy to increase yield.

I am not here to say discrimination method is not good, but I kind of getting into some opinion for what I have read in class. That is all, nothing much. People use their brain to think you know?! Human are getting smarter lately. Could not be blame~

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