Application of the Price Discrimination in Marketing

Abstract

The issue of price discrimination is widely discussed in microeconomic theory and antitrust legislation in the study of the behavior of monopolistic firms. In this article price discrimination is considered from a marketing perspective. This paper holds the view that price discrimination can be successfully practiced not only by monopolistic companies but by companies that have accepted the marketing approach of management. It upholds the idea that third-tier price discrimination, whether alone or jointly with second-tier price discrimination, has its place in company marketing management. Price discrimination from first degree is regarded as inapplicable in marketing because it runs counter to its basic principles. Market segmentation has been proposed based on the criterion of the perceived product value as well as on the determination of different prices for a given product offered to different consumer segments