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Application of the Price Discrimination in Marketing

Author

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  • Tatyana Netseva-Porcheva

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

The issue of price discrimination is widely discussed in microeconomic theory and antitrust legislation in the study of the behavior of monopolistic firms. In this article price discrimination is considered from a marketing perspective. This paper holds the view that price discrimination can be successfully practiced not only by monopolistic companies but by companies that have accepted the marketing approach of management. It upholds the idea that third-tier price discrimination, whether alone or jointly with second-tier price discrimination, has its place in company marketing management. Price discrimination from first degree is regarded as inapplicable in marketing because it runs counter to its basic principles. Market segmentation has been proposed based on the criterion of the perceived product value as well as on the determination of different prices for a given product offered to different consumer segments

Suggested Citation

  • Tatyana Netseva-Porcheva, 2013. "Application of the Price Discrimination in Marketing," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 51-63, September.
    • Handle: RePEc:nwe:eajour:y:2013:i:3:p:51-63
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    File URL: http://www.unwe.bg/uploads/Alternatives/A5-03.2013.pdf
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    References listed on IDEAS

    as
    1. Ann Marsden & Hugh Sibly, 2011. "An Integrated Approach to Teaching Price Discrimination," International Review of Economic Education, Economics Network, University of Bristol, vol. 10(2), pages 75-90.
    2. Shy,Oz, 2008. "How to Price," Cambridge Books, Cambridge University Press, number 9780521715645.
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    Cited by:

    1. M. J. Alhabeeb, 2020. "Price Discrimination as a Marketing Strategy," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 11(4), pages 1-1, March.

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    More about this item

    Keywords

    price discrimination; value based segmentation; algorithm for market segmentation based on consumer value;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M39 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Other

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