Pricing C13: Ethical, International, and Advanced Pricing Strategies

Anti-Price Discrimination Laws

Regulations like the U.S. Robinson-Patman Act prohibit charging different prices to similar buyers unless justified by cost differences.

Predatory Pricing Laws

Prohibit pricing below cost to eliminate competitors (e.g., antitrust laws in the EU).

Price Transparency

Laws requiring clear pricing (e.g., EU consumer protection directives mandating total price disclosure).

Fairness

Prices should reflect value without exploiting vulnerable customers.

Transparency

Avoid hidden fees or misleading terms.

Equity

Ensure pricing doesn’t disproportionately harm certain groups (e.g., low-income consumers).

Ethics in Pricing

Goes beyond legality to focus on moral responsibility.

Deceptive Pricing

Misleading pricing practices that create false impressions of value or savings.

Fake discounts

Advertising “Was $100, now $50” when the original price was never $100.

Hidden fees

Low base prices with undisclosed add-ons (e.g., airline baggage fees).

Bait-and-switch

Promoting a low-priced item to lure customers, then pushing a higher-priced alternative.

Price Fixing

Illegal agreements among competitors to set prices, restricting competition.

Horizontal Price Fixing

Type of price fixing wherein competitors collude (e.g., agreeing to fix minimum prices)

Vertical Price Fixing

Type of price fixing wherein manufacturers and retailers set resale prices (e.g., minimum advertised price agreements)

International Pricing Strategy

Adapting prices to suit global markets based on local conditions.

Differential Pricing

Vary prices by segment (e.g., luxury vs. budget models)

Gray Market Management

Prevent reselling across borders (e.g., restricting warranty transfers)

Time-Based Pricing

Adjusting prices based on timing, such as peak vs. off-peak periods.

Experience Curve Pricing

Lowering prices as production costs decrease due to accumulated experience (economies of scale).

Dynamic Pricing

Real-time price adjustments based on demand, supply, or customer behavior, often using algorithms.

Escalator Clauses

Contractual provisions allowing price increases based on rising costs (e.g., fuel, materials, or labor).

Diagnostic Perception Pricing

Setting prices to signal quality or value based on consumer perceptions.