Price Discrimination: The Path to Additional Profits?
What is price discrimination? Here is some help with the basics:
The idea that transactions in a marketplace work like an invisible hand is to some extent the idea that when a person chooses to buy an item at a given price they are happy with the deal. There is no coercion. If the person really does not like the deal they simply walk away.
Given that background. Your business partner is strongly opposed to your proposal to charge your largest customers lower prices for your web-based services than you will charge your smaller customers. She is arguing it is unethical, unfair and possibly illegal. What degree is this type of price discrimination and how will the plan increase revenue? MAKE A CASE that both customers will be satisfied with the deal and that this is a perfectly legal form of pricing in a business to customer relationship.