Price the seller varies the price of the product

Price discrimination, according to Investopedia.com, is a pricing strategy that charges customers different prices for the same product or service. Such discrimination occur upon different buyers, volumes, locations, dates, payment methods, and so forth. Surely it might be unethical and discriminatory of different consumers. Nonetheless, it is actually a proven strategy with great efficiency and fairness. Hence, this paper discusses and evaluates the reasons why price discrimination is fair and should not be banned. Indeed price discrimination would be illegal if the seller varies the price of the product or service on the basis of religion, race, gender, or nationality. To criticize on the potential of price discrimination leading into the discrimination of these factors, the Robinson-Patman Act surfaced in 1936 prohibiting anti competitive practices by producers and sellers. However, the argument has ceased nowadays due to the plentiful competition in rising corporations and the ever-so easy accessibility between small corporations and consumers through online shopping. Take for instance, how Samsung recovered from a major flaw in their product, Galaxy Note 7, after launching their new phone, Galaxy S8, jam-packed with new, innovative technologies, challenging a fiercer competition with other competing enterprises like Apple or LG. There are three degrees to price discrimination. The first being that the producer being aware of the maximum price any consumer will be willing to buy the product or service, the second being that pricing is varied by the quantity of demand, and the third being that the company divides the market into segments and accordingly fix the optimum price for each segment. For example, Victoria’s Secret, a famous manufacturer of women’s lingerie, has been testing price discrimination mailing different version of a similar product to people to figure out what customers would be willing to pay for their product. As an example of the second degree,  a Pharmaceutical company called GOLDPHARMA priced its tablets at a lower price for those who were buying some more, selling 24 tablets for $29.08 but only $69.15 for 96 tablets, encouraging consumers to buy more of their product. Finally, an example of the last degree is the issuing of private credit cards that provide special discounts or benefits within certain companies, both tightly grabbing the regular customers and triggering jealousy to those who don’t have them, which will lead them to buy their product/service. Overall, price discrimination is a proven pricing strategy that often brings a retailer great amount of profit. Under the circumstances that it would be used within the boundary of discrimination disregarding race, religion, gender, and nationality, it is a safe mechanism that involves psychological techniques for the customer to buy the product or service. Without it, companies will lack from others who use it, and they will resultantly be pushed off from the competition. For all the reasons above, price discrimination should not be banned.

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