Indirect Price Discrimination.Mathematics & Economics Essay

Indirect Price Discrimination
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Indirect Price Discrimination
Indirect price discrimination is a pricing approach which charges different prices with the costs according to the customer`s ability to purchase choices of similar products and services. It helps in achieving high-profit margins from buyers with a higher ambition to pay more for the goods. The use of price indiscrimination method helps the supplier or seller to increase their profits on the sale of products on the market (Lambrecht et al., 2012).
However, it can lead to seller incurring losses when the customers switch to the option of offering lower prices for the goods and services. Indirect price discrimination needs the seller to have detailed information about each customer may be willing to provide for the product in the marketing section. Therefore, the firm should carry out consumer behavior to acquire information on the price the customer can comfortably purchase a product. It helps the suppliers to have precise details on target consumers of the firm. Furthermore, the seller can use technology to understand the needs and preferences of their customers i...