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Definition

Price tailoring (or price discrimination) is the practice of charging different buyers different prices for the same quantity and quality of product.[1] Marketers have invented a variety of price discrimination tools, including coupons, rebates, and discounts. All are designed to exploit variations in price sensitivity among customers. Whenever customers have different sensitivities to price, or different costs to serve, the astute marketer can find an opportunity to claim incremental value through price tailoring.[2]

References

  1. ^ American Marketing Association. AMA Dictionary.
  2. ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc. <http://www.amazon.com/Marketing-Metrics-Definitive-Measuring-Performance/dp/0137058292>


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