• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Penpoin

Better knowledge. Sharper Insight.

  • Management
  • Economics
  • Finance
Management

Consumer pricing

Updated on April 12, 2022 · By Ahmad Nasrudin

Consumer pricing
You are here: Home / Management / Consumer pricing

Consumer pricing or consumer-based pricing is an approach to pricing which accommodates consumers’ perceptions of products and the prices they are willing to pay. Perception refers to the value given by consumers to a product. When consumers see that the product has a high value, then they are willing to pay more.

Advertisement

Companies must measure how much each consumer is willing to pay. Then, they charge prices according to their willingness. So, each customer will pay for a different price. Some individuals could pay higher than others.

In economics, this pricing approach refers to first-degree price discrimination or perfect price discrimination. Companies charge different prices to different customers, depending on how much they are willing to pay.

The consumer pricing technique will certainly provide the highest profit margins. However, in fact, it often only applies in theory.

It’s hard to discriminate prices in the real world perfectly. In addition to being difficult to measure customers’ willingness to pay, other problems arise. Individuals who buy cheaper will most likely sell it to buyers who are willing to obtain higher prices. Say, you purchase a product for Rp1,000. You know your friend wants it and is ready to pay high, say Rp2,000. Instead of buying from the same seller, of course, you will offer a product to your friend, say for Rp1,500. That way, you still get Rp500.

Economic Growth and Economic Development: Their Differences and Relationships

Economic growth has a close relationship with economic development. We need economic growth to support

Economic Growth: Factors, Importance, Impacts, How to Measure It

Economic growth refers to an increase in output in an economy over time. It can be short term or long term. In the short

Gini Coefficient: Meaning, Calculation Method, Data, Pros, and Cons

What's it: Gini coefficient is a statistic of economic inequality in a society. It tells you the distribution of income

Advertisement

Needs: Definition, Example, Type

What's it: Needs means requiring something because it is essential. For example, we need food, water, and shelter

Wants: Definition and Examples

What's it: Wants are hopes to have or fulfill something. If we want something, we expect to be able to buy it and

Hedge Funds Strategy: Macro, event-driven, relative value, and equity hedge strategies

Hedge funds rely on several strategies to make money. Hedge Fund Research, Inc. (HFRI) divides them into four

Hedge Funds:  Examples And What Do They Do?

What's is: Hedge funds are pooled investment funds by private investors, established in limited partnerships, and

Primary Sidebar

TOPIC

Accounting and Finance Business and Strategy Financial Statements Human Resources Investment Macroeconomics Marketing Microeconomics Operation

Advertisement

LATEST POST

  • Hedge Funds Strategy: Macro, event-driven, relative value, and equity hedge strategies
  • Leveraged Buyout (LBO): How it Works, Funding Sources, Criteria for Target 
  • Private Equity: Examples, Strategies, Targets, Its Ways To Make Money
  • Economic Growth and Economic Development: Their Differences and Relationships
  • Where Do Comparative Advantages Come From?
  • Three Injections In The Economy

MOST POPULAR

  • Business Size: Definition, Measurement, Classification
  • Span of Control: Importance, Types, Advantages, Disadvantages
  • The Role of Business in Society and the Economy
  • Government Intervention: Examples, Reasons, and Impacts
  • Sociocultural Environment: Meaning, Variables, Impact on The Business
  • Trade Restriction: Reasons, Types, and Impacts

Footer

SEARCH

POPULAR

  • Business Size: Definition, Measurement, Classification
  • Span of Control: Importance, Types, Advantages, Disadvantages
  • The Role of Business in Society and the Economy
  • Government Intervention: Examples, Reasons, and Impacts
  • Sociocultural Environment: Meaning, Variables, Impact on The Business

TOPIC

Accounting and Finance Business and Strategy Financial Statements Human Resources Investment Macroeconomics Marketing Microeconomics Operation

Copyright © 2023 · About Us  · Privacy Policy and Disclaimer  ·  Terms of Use  ·  Comment Policy  ·  Contact Us