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What Is a Price?
• The amount of money charged or paid for a
product or service.
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• A segmented pricing strategy uses two or
more different prices for a product, even
though there is no difference in the item’s
cost.
Segmented
Adjusting Prices to Allow
for Differences in Customers,
Products, or Locations.
Customer
Product Form
Location
Time
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TIME PRICING
• Demand for products and services rises at certain times.
• Charging higher prices at times when less price sensitive
buyers naturally purchase, and charge lower prices at times
when it would be inconvenient for them to purchase.
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Examples
The local outlet of a fast food chain charges $2.60 for a salad
from its salad bar if ordered a la carte. When ordered with a
sandwich, however, the salad bar costs only $1.99. In either
case, the customers are permitted to fill their bowls just once
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Smart Steak House
A fancy steak house in a shopping mall offers a 20%
discount to employees of other stores in the mall,
provided that they eat before 6:00 PM or after
8:00 PM
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Delicious Deli
A deli in a college town has an interesting pricing
strategy for students. The dinner specials at the
restaurant are normally $4.95. Students, however,
can buy weekly "meal tickets" that give them three
meals for $13.90, 5 meals for $22.25, or seven meals
for $29.90. The tickets expire at the end of each
week and they are not transferable
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The Importance of Segmented
Pricing
• Designing an optimal price structure that effectively
segments your market and maximizes your profitable sales
opportunities is clearly among the most difficult aspects of
pricing strategy.