Price Discrimination

This does level the playing field for both local department stores and online merchants selling the same products. Each can sell the goods at the same base price, but a local department store like Walmart can charge slightly more for the speed with which it can deliver it (Thau, 2014). Consumers who need the product quickly will not be hesitant to pay slightly more while other customers will pay the same amount in terms of time. Consequently, both the local department store

Through selling more in a lower price, Amazon can achieve economies of scale, which in return can increase their bargaining power over its suppliers and partners.

In the US, demand for this movie on DVD is income inelastic. In order for the firm to gain revenue, it will charge a higher price and sell a small amount of DVDs. However, in the UK, demand is income elastic so the Amazon will sell at a lower price in order to gain the maximum revenue.

Amazon make sure that customer service is the best, Customers experience low prices through Amazon, the fastest delivery, having a form of reliable contact. Amazon customer service problems have allowed retailers to sell itme on the website, to make broaden the worlds selections of products. Amazon has a rival EBAY, which also allows merchant to sell and buy through its site, but with eBay there has been complaints with poor service and fraud (Cohen, 2009).

Amazon.com Inc. was initiated by Jeff Bezos in 1994 after realizing the rapid rate at which the internet and websites were growing in popularity among business organizations and individuals. In 1995, the company started operating its website for selling books, videos, compact discs, computer software and computer hardware before being incorporated in1996 as an e-commerce company (Reuters, 2015). Apparently, the company offers may products and services for sale; these products include merchandise for resale products offered by third parties. In this regard the

Odd-even pricing – Using numbers to trick and fuck people into thinking goods are cheaper

Amazon focuses on global reach, putting customer first,, and extensive selection of products through its vision which is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory 2016).

Good service makes you feel like a valued customer. Thus, you will keep on going back to the store or buy the product again. If a shop has poor service lots of customers won’t visit it again. For example, my family goes to a Lebanese restaurant constantly because of the good service as they make us feel like valued customers on top of the good food.

Amazon stated its marketing approach in its 2011 annual report as “we direct customers to our websites primarily through a number of targeted online marketing channels, such as our associated program, sponsored search, portal advertising, email marketing campaigns, and other initiatives.”(Petro, 2017). Being the leader of the ecommerce industry, Amazon maintains that

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Price discrimination can be defined as when the same good or service is sold at different prices to different consumers. If we look at this definition of price discrimination, for an example, we can show that price discrimination can be seen in the entrance tickets of parks such as Universal studios; this is due to the fact that there are discounts for children and senior citizens. (Phlips L. , 1983) However, this can be seen as not being discriminative at all due to the fact that if the price difference full reflects the difference in the cost of carrying the good from the seller’s location to the buyers’ location.

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).

They have this thing called Amazon Prime Now, that gives customers that have it, better deals and discounts in products on the website; to clarify, the website makes their audience spend money twice when shopping there. First, they have to become an Amazon Prime Now and that costs a subscription fee and then they will purchase the products with a discount; this is beyond genius because, Amazon not only uses the time limited technique, but also uses the Competition for Scarce Resources technique. Therefore, people will feel attracted to purchase, because there is a competition against customers that are not prime and those deals are only exclusive for

Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.

R. Preston McAfee, Price Discrimination, in 1 ISSUES IN COMPETITION LAW AND POLICY 465 (ABA Section of Antitrust Law 2008)