Price Differentiation

A pricing strategy that charges different segments of customers altered prices for the same products or services.

Deeper Insights, an online travel agent, recently faced a price discrimination scandal by charging higher prices and displaying more expensive listings for customers accessing the site from an Apple Mac computer as opposed to a Windows PC. Orbitz adjusted their prices this way under the assumption that Mac computers are more expensive and, therefore, Mac users are more affluent.

Though this can be an effective tool to target certain types of customers, one must be weary when implementing the software because it can offend potential customers or even compromise customer privacy.

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Related Keywords: Tiered Pricing, Pricing Strategy, Psychological Pricing, Perceived Value, Geographical Pricing