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. Pricing ConstraintsHorizontal price A group of competing retailers (or other channel members operatingfixingat a given level of distribution) establish a fixed price at which to sellcertain brands of productsA retailer collaborates with the manufacturer or wholesaler to resellan item at an agreed-on price; also called resale price maintenance orfair tradeVertical pricefixingPriceTwo retailers buy an identical amount of "like grade and quality"merchandise from the same supplier but pay different pricesdiscriminationA misleading price is used to lure customers into the store andDeceptivepricingthen hidden charges are added; or the item advertised may beunavailablePredatorypricingA retail chain charges different prices in different geographic areas toeliminate competition in selected geographic areasLO 1Pricing ConstraintsJustification for some types of pricediscriminationCost justification defense - Accounted fordifferences in cost to:• The seller in the manufacture, sale, or delivery arisingfrom differences in the method or quantitiesChanging market conditions defenseDanger of imminent deterioration of perishable goodsor on the obsolescence of seasonal goodsMeeting competition in good faith defenseL I

Price discrimination means charging different prices for the same product from different customers.…

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.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 2DYMP

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Question

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

Definition Definition Pricing strategy based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.

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