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Definition

Segmented pricing

Definition (1):

It refers to sell a product or service at two or more prices, where the difference in prices is not based on differences in costs. In the case of this pricing, companies will often adjust their basic prices to allow for differences in customers, products, and locations.

Definition (2):

It means the company selling a good or service at two or more prices, based on segment differentiation rather than cost alone.

Definition (3):

It is a situation when a business sets multiple prices for a product without facing any differences in the production costs or distribution costs. For instance, a business may use this pricing method for taking advantage of pricing inequalities seen between distinct geographical locations.

This pricing can be of four types. They are as follows:

  • Time pricing
  • Location pricing
  • Product-form pricing
  • Customer-segment pricing

Use of the Term in Sentences:

  • Segmented pricing is also known as price discrimination.
  • When customers use any service or buy any product very rarely, segmented pricing is a good choice.
  • Companies can implement segmented pricing by coupons.
  • Companies should use segmented pricing thinking about the cost parameters.
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