Price discrimination in Practice


Sometimes, we as consumers are not aware of the practice of price discrimination. In addition, price discrimination does not always occur in a righteous manner. Then the following question pops up into the mind; is price discrimination actually an honest way of doing business?

Price discrimination

While, there are actually people who as customer discovered an unfair way of dealing of the company Telenet. According to these customers, Telenet applied different policies regarding the price increase of their subscription among different customers of the company. This company gave multifarious amount of discounts to different customers and this just depended whether how actively they had complained about this issue or not (Reijerman, 2015). According to me, some kind of price discrimination can be a righteous manner of handling, but the policy should be fixed, transparent and be made public at beforehand. The way Telenet has done business is an unacceptable manner.

Additionally, many web shops, but also banks, credit card companies and insurances companies try to estimate how much their customers can spend to optimize their incomes. Subsequently, they adapt their prices to the information they have gathered. And this again differs per customer. The main weapon of these companies are ‘cookies’, these cookies help them to collect all kind of information of their (future) customers (Groot, 2012). As it may have attracted many of our attentions, almost all of the websites we visit ask to accept their cookies to make optimal use of their websites. Actually, sometimes I am forced to accept these cookies even if I do not want it as otherwise I cannot see the content of a specific website. What do you think of this situation?

Cookies

However, fortunately, these online price discrimination actions can be beaten. Maybe you know them already, but it is not bad to mention them. According to Carmi Levy you can play the waiting game with online web shops. When you are thinking of buying an item, just put it into your shopping chart, do not check out and just leave it that way. He has experienced that they will return to you, and well, with a discount coupon. Secondly, always adjust your cookie settings. By doing so, you remove the data advantage of these web shops. And last but not least, you can ‘turn on private or incognito browsing’. This just minimizes the amount of data that is shared with online shops (http://www.cbc.ca/news/canada/british-columbia/online-price-discrimination-exists-and-it-can-be-beaten-1.3072746, 2015). Maybe this will not remove price discrimination, but it is a way to diminish the power of the online retailers. What is your opinion regarding this topic?

370681pd

Sources:

Groot, A. (2012) ‘Digitale schaduw en prijsdiscriminatie’, last visited on 10 October 2015 via http://www.radartv.nl/columns/archief/detail/article/digitale-schaduw-en-prijsdiscriminatie/.

‘Online price discrimination exists – and it can be beaten’ (2015) last visited on 10 October 2015 via http://www.cbc.ca/news/canada/british-columbia/online-price-discrimination-exists-and-it-can-be-beaten-1.3072746.

Reijerman, D. (2015) ‘Boze klanten beschuldigen Telenet van prijsdiscriminatie’, last visited on 10 October 2015 via http://tweakers.net/nieuws/100897/boze-klanten-beschuldigen-telenet-van-prijsdiscriminatie.html.

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2 responses to “Price discrimination in Practice”

  1. gustavswritesforinformationstrategyorsomething says :

    An interesting question of, when is it fair to use price discrimination arises. It is interesting that mostly it is about communication and about our perception. If Cable TV company would offer us several packages, it would be seen as totally normal action. However, when the cable company removes some channels and says that now we need to pay more, we see it as unfair.
    More: http://nothingbutmarketing.blogspot.nl/2012/07/price-discrimination-when-is-it-seen-as.html

    Also, interesting idea is at what points should we allow the customers to “segment” themselves by offering them to pay how much they want to:
    https://hbr.org/2015/03/let-your-customers-segment-themselves-by-what-theyre-willing-to-pay

    Yeah. It seems that I’m better with rhetorical questions rather than any answers 🙂

    P.s. All you need to know about various pricing strategies is here. An incredibly elaborate article: https://medium.com/@brandon_lee_09/the-ultimate-guide-to-price-strategy-60e2c19be71a?_hsenc=p2ANqtz-_RWybVoJS1mCkbuWNGbTw3v4qVOBv75IlBJgRKrUT2jjHoU5GRw0sddlHVKhGVmiCE3n9-TnCMSyL1NkhhP8W_g4gNfg&_hsmi=16814841

    • 370681pd says :

      Thank you for your comment! These are indeed interesting questions and aspects as well to do some research on.

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