Micro Part 3 Flashcards
Micro theories assumes that (preferences) :
Are given
Do not change over time
And people are not influenced by each other
Pricing and anchoring effect
A cognitive bias when making a buying decision, people focus on the first available information ( the anchor)
—> buying behavior is influenced by marketing + rational effects is
Consumer surplus:
When willingness to pay> market price
Tout en haut
Producer surplus
Amount received > min amount he was willing to accept
3 types of price differentiation :
- Group pricing (3D degree)
- product differentiation
- personalized pricing
Group pricing :
1- explicit price différenciation
2-implicite price différenciation
Explicite price différenciation :
Differentiating btw groups through visible characteristics.
Reduce prices for customers with a higher price elasticity of demand by selecting then via visible traits :
- senior / kid meals
- region
- student prices
Implicit price différenciation :
Differentiating btw customers through implicit factors :
Reduce price for customers with higher price elasticity of demand
No visible traits:
Time
Location
Convenience
Ex: coupons
Non linear pricing :
-an implicite group pricing strategy :
Separates groups by charging different prices for different amounts of purchases
-discount for bulk purchases
Personalized pricing (1st degree differentiation)
Entry fee extracting almost all customer surplus
If company knew they will charge customer an individual price based on the indiv willingness to pay
Cartel and collusion ;
Organisation created from a formal agreement Btw a group of producers to regulate supply and manipulate prices
Collusive behavior : higher prices charged
How can a company increase its revenue for a given demande
Price discrimination
Acting like a monopoly (cartel)
