 Pricing Process Part 3: Structure (3a: Price Differentiation)Frank Frohmann Chapter 7 in Digital Pricing, 2023, pp 149-177 from Springer Abstract: Abstract Price differentiation is one of the most important profit levers within the pricing process. This is particularly true for digital services. Customers are divided into subgroups that are as homogeneous as possible according to certain criteria. This allows the target groups to be addressed with differentiated prices. The overriding objective is to optimize profits by exploiting the differences in preferences and price elasticities of the segments. Data-driven business models enable multidimensional price differentiation. An example of this is simultaneous price differentiation according to region, user and their purchase quantities. Different prices per person and country are supplemented by a non-linear price model. The goal of multidimensional price differentiation is a finer segmentation based on the outlined price dimensions. This allows the existing willingness to pay to be captured even better. It should be noted, however, that the complexity of the price structure can still be grasped by the buyer. The more similar customers, products, timing and/or sales channels are and the more different the prices at the same time, the higher the risk potential for the companies. Date: 2023 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-031-24591-6_7 Ordering information: This item can be ordered from DOI: 10.1007/978-3-031-24591-6_7 Access Statistics for this chapter More chapters in Management for Professionals from Springer |
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