Naval Price Discrimination: Charge Some People More
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Jul 23, 2019 Discover the intriguing world of price discrimination and how businesses leverage it to boost profits. Learn why wealthier consumers and large enterprises often pay more for the same products or services. The discussion delves into real-world examples like airline seating and software pricing, showcasing strategies that capitalize on customers' willingness to pay. It's a fascinating look at the economics of pricing that affects everyone, from casual shoppers to corporate giants.
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Price Discrimination
- Price discrimination lets you charge based on willingness to pay, not arbitrary reasons.
- Offer extras that appeal to higher-paying customers, like premium features or comfort.
Business Class Example
- Business class seats exemplify price discrimination, costing far more than economy despite a smaller cost difference for airlines.
- This caters to richer individuals' willingness to pay for extra comfort or status.
Freemium Software
- Freemium software uses price discrimination by offering a basic free version alongside premium paid ones with extra features.
- These might include enhanced security, dedicated hosting, or multi-user administration tools for businesses willing to pay a premium.