ABSTRACT
This chapter outlines issues associated with answering the Key Business Question by using the classes of pricing strategies. A uniform pricing strategy is one that uses a simple, single price for all units sold to all buyers. A price discrimination strategy is basically a strategy to sell products to different people at different prices. There are three basic forms, or degrees, of price discrimination. In first-degree, price varies by how much each consumer is willing and able to pay for the product. In second-degree, price varies with the amount purchased. The fashion example is a third-degree price discrimination form because consumers are divided into two segments: fashion-forward and non-fashion-forward. The chapter introduces the importance of a price effect measure, basically the price elasticity. It discusses approaches to pricing research. The chapter describes the use of a simulator to study the results of quantitative research and highlights the role of elasticities.
