Price Discrimination

It occurs when a company sells a product or service at

different rates. It is of 3 types.

First degree price discrimination: Here, the seller
charges a separate price to each customer depending
on the intensity of demand.

Second degree price discrimination: Here, the seller
charges less to buyers who buy a large volume

Third degree price discrimination: Here, the seller
charges different amount to different classes of buyers
as mentioned in the following cases.
Customer segment pricing:
Different customer groups pay different prices
for the same product or service.

For example..museums often charge a lower
admission fee to students or senior citizens.
Product form pricing:
Big bazaar sells mens full sleeves shirt in the
range starting from 300-800/- with having a
difference in quality of fabrics.


Image pricing:
Some companies price the same product at
different levels based on image differences.
For example all the cosmetic products.

Channel pricing:
Coca-Cola carries a different price depending
on whether the consumer purchases it from
a costly restaurant or a fast food restaurant .

Location pricing: The same product is priced
differently at different locations.
For example. viewing cricket match in stadium.

Time pricing: Offering different prices with
change in season / price on every day vs.
price charged on weekends.
For example.. some hotels offer off season
discount or some restaurants charges less
price of foods at weekends.
Yield pricing: Some of the airlines and
hospitality industries offers discount on
early purchase or change in price with the
change in flight timings.
Sometimes, company offering low cost for
products whose expiry date is very near.
Role & scope of branding:
Brand equity reflects how consumer think, feel and
feel and act with respect to the brand.

It may be positive or negative depending on the
reaction of customers in positive or negative
manner about a product.

Brands give an assurance of quality so that satisfied
buyers can easily choose the products.



Brand loyalty creates a barrier for entry of other
firms for the same product.

Branding is a powerful means to secure a
competitive advantage.

It is a valuable legal property which influences
the consumers behavior of buying a product.

Brand is a perceptual entity which is rooted
in reality of the consumers mind.

Branding is forcing the positive image of a
product into consumers mind.

Brands should be able to make a clear cut
difference of the product w.r.t its
competitors offering.
The creation of significant brand equity requires
reaching the top of the brand pyramid:

A) Brand salience how often and easily consumers think of the brand.

B) Brand performance is how well the product or service meets
customers functional needs

C) Brand imagery describes the extrinsic properties of the product or
service

D) Brand judgments focus on customers own personal opinions and
evaluations

E) Brand feelings are the customers emotional responses and reactions
with respect to the brand.

Brand elements are those trade markable
devices that identify and differentiate the
brand.

Brand Element Choice Criteria
A) There are six criteria in choosing brand
elements. The first three (memorable,
meaningful, and likeable) can be characterized
as brand building in terms of how brand
equity can be built through the judicious choice
of a brand element.
B) The latter three (transferable, adaptable, and
protectable) are more defensive and are
concerned with how the brand equity contained
in a brand element can be leverage and
preserved in the face of different opportunities
and constraints.
1) Memorable
2) Meaningful
3) Likeability
4) Transferable
5) Adaptable
6) Protectible

Brand reinforcement:
A brand needs to be carefully managed so that its value does not
depreciate with time.
It is possible only by putting constant effort to improve the product,
services & marketing.
E.g companies like Coca cola & Heinz are able to survive today only
because of paying attention towards improving their products, services
and marketing.

Brand equity is reinforcement by marketing action that consistently
convey the image of brand and further tries to improve it by offering
more value added products.

For exampleNivea, one of the strongest brand from Europe has
expanded its scope from a skin cream brand to a skin care and personal
care brand.

Brand revitalization: Here, we try to understand the sources of
brand equity and how to begin for achieving the same.

Generally, it is easier to revive a brand which is alive but has been
more or less forgotten. If it is not done then ultimately results into death
of the brand.

Brands which failed to move its name forward like Polaroid found that
their market leadership decreased and even disappeared.

For example..Harley Davidson in 1903 has twice escaped itself from
bankruptcy but is today one of the most recognized motor vehicle
brand in the world.

It was made possible by improving the complete manufacturing
process in 1980s. It also developed a strong brand community by
forming an owners club called the Harley Owners Group (HOG) which
sponsors bike rallies & other similar events.
Cadburys Bournvita: It was launched in 1948 &
maintained its position in the market by introducing the
new variants inline with the customers choice.

In 1970s it focused on good upbringing of child
Goodness that grows with you.
In 1980s Brought-up right, Bournvita bright etc..

Changes in the packaging and introducing different
flavours helped in improved positioning of the products.

5 Star, a strong brand in the chocolate category
collaborated with Bournvita and introduced a new variant
named Bournvita 5 Star chocolate.
Brand Strategy:
when a firm introduces a new product, it has following 3
choice.
1. It can develop new brand element for the new product.
2. It can use some of its existing brand elements.
3. It can use a combination of new & existing brand elements.

When a firm uses an established brand to introduce a new
product, the product is called a brand extension.

When marketers combine a new brand with an existing
brand, the brand extension is also called as subbrand like
Amul Masti Dahi.
Brand extension falls into 2 general categories.
In Line extension, the parent brand covers a new product within a product
category, it currently serves such as with new flavors, colors, ingredients
and package size.

For example.. Life buoy soap from Hindustan Unilever has many line
extensions and each one is identified by specific names such as Lifebuoy
care, Lifebuoy Deofresh, Lifebuoy nature and Lifebuoy Total in addition to
its Lifebuoy liquid soap.

In category extension, the parent brand is used to enter a different product
category from the one it currently serves.

For example.. Honda has used its company name to cover different
products such as automobiles, motorcycles, snow blowers, lawn mowers,
marine engine and snow mobiles.
Thus, Honda advertises that it can fit six Hondas in a 2 car garage.
A Brand line consists of all products original as well as category
extensions-sold under a particular brand.

A Brand mix (Also known as brand assortment) is the set of all brands
introducing brand lines that a particular seller makes available to buyers.

Branded variants is specific brand lines supplied to specific retailers or
provide distinct offerings.