September 17, 2018
Professor Anthony Dukes, from the University of Southern California, spoke about the compelling topic of "price discrimination" on Sept. 13, 2018, at the University of Montana Western.
Professor Dukes studies the economics of marketing strategies, particularly as they apply to pricing, retail and distribution channels and antitrust laws.
During the presentation, he focused on how sellers segment consumers for the purposes of charging different people different prices and included everyday examples to demonstrate price discrimination. Although this marketing tactic is based on several factors, it focuses mainly on what a customer is willing to pay. If a business is able to extract a different value for a different willingness to pay, this can lead to increased profits for that business.
Dukes started the presentation with an example in the salon industry, stating that a woman’s haircut is usually more expensive than a man’s haircut, usually by five or more U.S. dollars. He explained that a misconception many argue is that women have more hair to work with, but men’s haircuts can be just as complex and take the same or longer amount of time. This demonstrates a price discrimination based on gender.
Dukes gave more examples ranging from the prices of airline tickets, movie theater admission, to buying a hardcover vs. paperback book. He compared Mac users and PC users and the price discrimination that can come into play, even being based on what browser or device the consumer is using.
“Is price discrimination fair? That depends on who is paying the higher price. Once you introduce competitors, price discrimination is a win for all customers,” said Dukes during the conclusion of his presentation.
Dukes teaches pricing strategies and the core marketing management course in the Marshall School of Business MBA program. He is also an associate editor and contributor to the “Journal of Marketing Research,” “Management Science,” and “Marketing Science.”
According to Montana Western Associate Business Professor Christian Gilde, “For me, pricing is the most interesting and most flexible variable in the marketing mix among the marketing tools we have.”
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