ABSTRACT
This chapter illustrates how price fences can be employed to segment consumer goods markets. Examples are drawn from a wide range of industries: transport, coffee chains, hearing care, drugs, roadside assistance, internet conferencing, mobile phone contracts and fantasy-gaming.
In rail transport, railcards are available for students, young people, seniors and some geographical regions; pre the 2020 pandemic, there were peak and off-peak fares and discounts for advance booking. Versioning and good-better-pricing are illustrated in roadside assistance, hearing products and internet conferencing. Volume discounts are available in rail travel (season tickets), coffee chains (larger cup sizes) and mobile phone contracts (price per GB falls as volume increases). The power of branding is shown in the market for drugs where branded products are sold at much higher prices than their generic equivalents although the active ingredients are identical. Finally, the importance of value-to-customer is shown in the market for fantasy gaming collectable cards where prices vary depending on the cards’ “power” in the game.
