PRICE DISCRIMINATION AND GLOBAL MARKET FILES.pptx

1. THERESA MAY QUIERO & SADIA, MEISA
ILLUSTRATIVE REPORT IN PRICING STRATEGY
TOPIC #5. PRICE
DISCRIMINATION AND
GLOBAL MARKET.

2. WHAT IS PRICE
DISCRIMINATION& GLOBAL
MARKET
 Price discrimination is a pricing strategy where businesses charge different
prices to different customers for the same product or service. The main
objective of price discrimination is to maximize profits by capturing the
maximum amount of consumer surplus.
 When it comes to the global market, price discrimination becomes more
complex due to the varying economic conditions, consumer preferences, and
competition in different countries. Global companies often employ price
discrimination strategies to optimize their pricing and maximize revenue
across different markets.

3. PRICE DISCRIMINATION
refers to the practice of charging different prices for the same
product or service to different customers or groups of customers. It
involves the ability of a seller to segment the market based on factors
such as customer Preferences, willingness to pay. Location, or
purchasing power. The goal of price discrimination is to maximize
profits by capturing the surplus value from different customer
segments.

4. THERE ARE 3 TYPES OF PRICE
DISCRIMINATION
FIRST-DEGREE PRICE DISCRIMINATION
SECOND-DEGREE PRICE DISCRIMINATION
THIRD-DEGREE PRICE DISCRIMINATION

5. FIRST-DEGREE PRICE
DISCRIMINATION
This is also known as perfect price
discrimination. in this form, the seller charges
each customer their maximum willingness to
pay/price. This means that each customer pay
a different price, and the seller captures the
entire consumer surplus.

6. 1ST DEGREE PRICE
DISCRIMINATION EXAMPLE
include negotiation in buying a car or
artwork.
Real world examples:
Auction house, jewelry, car, paintings,
(2nd handed) car dealership

8. 2. SECOND-DEGREE PRICE
DISCRIMINATION
HERE THE SELLER OFFERS DIFFERENT PRICING TIERS
BASED ON QUANTITIES PURCHASED.
EXAMPLE- BUY 1 GET 1 FREE OFFERS OR QUANTITY
DISCOUNTS ARE COMMON EXAMPLES OF 2ND DEGREE
PRICE DISCRIMINATION. THE IDEA IS TO INCENTIVIZE
CUSTOMERS TO BUY IN LARGER QUANTITIES BY OFFERING
LOWER PRICES FOR HIGHER VOLUMES.

10. 3. THIRD-DEGREE PRICE DISCRIMINATION
• THIS FORM OF PRICE DISCRIMINATION INVOLVES CHARGING DIFFERENT
PRICES BASED ON SEGMENTS OF CUSTOMERS WITH DIFFERENT PRICE
ELASTICITIES OF DEMAND. PRICE DISCRIMINATION BASED ON AGE, INCOME
LEVELS, OR GEOGRAPHICAL LOCATION ARE COMMON EXAMPLES OF THIRD
DEGREE PRICE DISCRIMINATION. -FOR INSTANCE, MOVIE THEATERS OFTEN
HAVE DIFFERENT TICKET PRICES FOR CHILDREN, ADULTS AND SENIOR
CITIZENS.

11. Movie/cinema
Theatre

12. WHAT IS GLOBAL MARKET
 WHEN IT COMES TO THE GLOBAL MARKET, PRICE
DISCRIMINATION BECOMES MORE COMPLEX DUE TO THE
VARYING ECONOMIC CONDITIONS, CONSUMER PREFERENCES,
AND COMPETITION IN DIFFERENT COUNTRIES. GLOBAL
COMPANIES OFTEN EMPLOY PRICE DISCRIMINATION
STRATEGIES TO OPTIMIZE THEIR PRICING AND MAXIMIZE
REVENUE ACROSS DIFFERENT MARKETS.

13. THE 5 TYPES OF GLOBAL MARKET PRICE
DISCRIMINATION
REGIONAL PRICE DISCRIMINATION
TARIFF AND DUTY OPTIMIZATION
CURRENCY EXCHANGE RATE ADJUSTMENTS
PRODUCT DIFFERENTIATION
PROMOTIONAL PRICING AND SALES

14. 1. REGIONAL PRICE DISCRIMINATION
 COMPANIES MAY ADJUST THEIR PRICES BASED ON
REGIONAL DIFFERENCES IN PURCHASING POWER, COST
OF LIVING, OR MARKET DEMAND. FOR EXAMPLE, A
COMPANY MAY OFFER LOWER PRICES IN DEVELOPING
COUNTRIES COMPARED TO DEVELOPED COUNTRIES TO
MAKE THEIR PRODUCTS MORE AFFORDABLE AND
COMPETITIVE

15. 2. TARIFF AND DUTY OPTIMIZATION
 PRICE DISCRIMINATION CAN ALSO BE USED TO
NAVIGATE INTERNATIONAL TRADE BARRIERS SUCH AS
TARIFFS AND IMPORT DUTIES. COMPANIES MAY SET
DIFFERENT PRICES IN DIFFERENT COUNTRIES TO
ACCOUNT FOR THESE ADDITIONAL COSTS AND MAINTAIN
PROFITABILITY.

17. 3. CURRENCY EXCHANGE RATE
ADJUSTMENTS
 FLUCTUATIONS IN CURRENCY EXCHANGE RATES
CAN HAVE A SIGNIFICANT IMPACT ON PRICING IN
THE GLOBAL MARKET. COMPANIES MAY ADJUST
THEIR PRICES IN DIFFERENT COUNTRIES TO
ACCOUNT FOR CURRENCY RISKS AND EXCHANGE
RATE FLUCTUATIONS.

19. 4. PRODUCT DIFFERENTIATION
 PRICE DISCRIMINATION CAN BE ACHIEVED BY
OFFERING DIFFERENT PRODUCT VARIANTS OR
BUNDLES TO CATER TO DIFFERENT MARKET
SEGMENTS. THIS ALLOWS COMPANIES TO
CAPTURE HIGHER PRICES FROM CUSTOMERS WHO
VALUE ADDITIONAL FEATURES OR BENEFITS.

21. 5. PROMOTIONAL PRICING AND SALES
 COMPANIES OFTEN USE PROMOTIONAL PRICING
AND SALES TO STIMULATE DEMAND AND
ATTRACT CUSTOMERS IN DIFFERENT MARKETS.
THESE PROMOTIONAL ACTIVITIES CAN VARY
ACROSS COUNTRIES TO ALIGN WITH LOCAL
PREFERENCES AND MARKET CONDITIONS.