Fundamentals of Business

An example of price discrimination

The example above is the price of Apple laptops with exactly the same specifications. Exchange rate at the moment is over $2 = £1, therefore, the price of Apple laptop in terms of dollars is, $1898, that is approx. $400 extra in United Kingdom. When you log in apples website, they instruct you to choose a country or enter zip code, by doing so, they are actually discriminating you and therefore charge you a different price.

Also companies like Dell use the same principle.
Almost all software companies discriminate by using classes of users:
. Student and home
. Professional
. Small bu business siness
. Medium businesses
. Large business.

I once bought Corel Draw 11 academic edition for£199, I asked the salesman what is the difference between academic and professional addition and he told me, there is no difference whatsoever as far as the contents of the software are concerned yet the professional edition was £350.

Promoting the product
Advertising, personal (face-to-face) selling, and sales promotion are the methods for inducing people to buy. The primary objective of advertising is to pre pre sell t the product he that is, to convince consumers to purchase an item before they actually see and inspect it. Most companies consider this function so important that they allocate extensive budgets and engage specialist advertising agencies to develop their program of advertising. By repeatedly exposing the consumer to a brand name or trademark, to the appearance or package of a product, and to special features of an item, advertisers hope to incline consumers towards a particular product.

Advertising is most frequently done on television, radio, and billboards or other large displays; in newspapers, magazines, and catalogues; and through direct mail to consumers. In recent years, advertising agencies have been joining forces to become giants, making it possible for them to offer their clients a comprehensive range of worldwide promotion services.

The purpose of sales promotion is to supplement and coordinate advertising and personal selling; this has become increasingly important in marketing. Often it is necessary to work closely with the dealers who handle a manufacturer's products to make sure that satisfactory sales levels are achieved. Displays must be supplied and set up, and cooperative advertising programs may be worked out.

Shop staff should be trained so that they have knowledge of the manufacturer's products. Often the manufacturer must provide services such as installation and maintenance for a specified time period. On the consumer level, sales promotion may involve special merchandising inducements such as discount coupons, contests, a premium (gift) with the purchase of a product, or a lower price on the purchase of a second item.