In order for price discrimination to be legal, what conditions must be met? Explain each condition and then discuss the ways a retailer can defend itself against price discrimination. NOTE: info in the photo attached.
In order for price discrimination to be legal, what conditions must be met? Explain each condition and then discuss the ways a retailer can defend itself against price discrimination. NOTE: info in the photo attached.
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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In order for price discrimination to be legal, what conditions must be met? Explain each condition and then discuss the ways a retailer can defend itself against price discrimination.
NOTE: info in the photo attached.
Transcribed Image Text:Pricing Constraints
Horizontal price A group of competing retailers (or other channel members operating
fixing
at a given level of distribution) establish a fixed price at which to sell
certain brands of products
A retailer collaborates with the manufacturer or wholesaler to resell
an item at an agreed-on price; also called resale price maintenance or
fair trade
Vertical price
fixing
Price
Two retailers buy an identical amount of "like grade and quality"
merchandise from the same supplier but pay different prices
discrimination
A misleading price is used to lure customers into the store and
Deceptive
pricing
then hidden charges are added; or the item advertised may be
unavailable
Predatory
pricing
A retail chain charges different prices in different geographic areas to
eliminate competition in selected geographic areas
LO 1
Pricing Constraints
Justification for some types of price
discrimination
Cost justification defense - Accounted for
differences in cost to:
• The seller in the manufacture, sale, or delivery arising
from differences in the method or quantities
Changing market conditions defense
Danger of imminent deterioration of perishable goods
or on the obsolescence of seasonal goods
Meeting competition in good faith defense
L I
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