Respond to each classmate 100 word or more Indirect price discrimination Classmate 1 “Price discrimination is a selling strategy that charges customers different prices for the same product or servic
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Respond to each classmate 100 word or more
Indirect price discrimination
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“Price discrimination is a selling strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to” (James, 2021). The concept of price discrimination is to generate more revenue from consumers. “Direct discrimination consists of rules or procedures that explicitly mention minority or disadvantaged groups based on sensitive discriminatory attributes related to group membership. Indirect discrimination consists of rules or procedures that while not explicitly mentioning discriminatory attributes, intentionally or unintentionally could generate discriminatory decisions” (Haijan & Domingo-Ferrer, 2013). The common protected characteristics are race, religion, sex and sexual orientation. Indirect discrimination is also called second-degree price discrimination and is one of the three types of price discrimination. There are various cases of indirect price discrimination. The most mainstream case is grocery store coupons. Coupons are used as commerce to differentiate their customers by their supply price. Store manufacturers often charge higher prices on certain products or services, knowing that they’ll consumers will pay for it anyway. The coupon method discriminates based on a consumer’s time. Consumers who generally have more elastic demand tend to use coupons more often and find the activity more profitable. Consumers whose time is more valuable do not use coupons. “Coupons attract sensitive consumers to the same product by offering a discount; By using price discriminations, the seller makes more revenue, even off of the price sensitive consumers” (Price Discrimination, n.d). All ways of price discrimination is aimed to earn the selling company more revenue.
The grocery store coupon market is one that in my opinion, has been growing. Many people now are sharing couponing stories and teaching them to others. Coupon clipping usually happens by people who prefer a bargain and have additional time to review coupons before going to the store. If you are able to look through the sales papers and go to specific stores to use coupons, the companies offer incentives like lowers prices. You are not able to easily identify what kind of shoppers are in the store to directly discriminate. The coupon method offers stores a chance to make sales at lower prices to specific sets of customers. Not all people going to the store think of or have time to clip coupons beforehand, With more people learning how to effectively coupon, it is taking away the profitability. The purpose of price discrimination is for not everyone to participate. The opposite of that would be like price inclusion, and that would be generalizing prices. Indirect price discrimination differs from direct because of the target audiences. In one method they are easily identifiable while in the other it is almost impossible to identify them. I have learned that many places that offer discounts and incentives to do business are discriminating. The example about shopping in advance resonated with me because I tend to purchase travel tickets last minute.