Marketing: Real People, Real Choices, Student Value Edition Plus MyLab Marketing with Pearson eText -- Access Card Package (9th Edition)
Marketing: Real People, Real Choices, Student Value Edition Plus MyLab Marketing with Pearson eText -- Access Card Package (9th Edition)
9th Edition
ISBN: 9780134640112
Author: Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart
Publisher: PEARSON
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Chapter 10, Problem 12QA
Summary Introduction

To explain: The concept of the terms, two-part pricing, price bundling, captive pricing and distribution based pricing tactics.

Introduction: Distribution based pricing strategies involve pricing of the goods to cover the cost of shipment. Distribution based pricing is an important part of marketing.

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Scissors, a local hair salon, practices a known form of price discrimination by charging students and senior citizens a discounted price of R80.00 for a haircut, while all other regular customers are charged R120.00 per cut. With the aid of a graphical illustration, identify the type of price discrimination practiced and explain the firm’s pricing strategy to maximise profits.
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