Price discrimination is a pricing strategy used to maximize profits by charging different prices to different customers for the same product or service, based on what each customer is willing to pay.
The goal isn’t to charge less to some, but to capture sales from people who wouldn’t buy at the full price, while still maintaining higher prices for those who will. It’s a way to increase total revenue without lowering prices for everyone and without undermining the product’s perceived value.
Common examples include discounts for students or seniors, bulk pricing, early bird specials, or offering slightly different versions of the same product.
Key point: It’s not about fairness or generosity—it’s about segmenting the market to increase overall profit without upsetting your core, full-price-paying audience.