Price discrimination is the sale of the same product at different prices to different customers. This situation is usually experienced in the physical market, depending on the bargaining power of the buyer. Internet technology has made this situation viable in online marketing too based on the customer profile. Companies manipulate customers' personal information, such as purchasing history to weigh their preferences and price sensitivity. The customers with an excellent purchasing history are likely to pay more while the price-sensitive may get the same items at a lower price. The most significant advantage of this practice is that a firm can reach many customers irrespective of their economic condition. Any client will afford the product depending on his/her bargaining power, location or social class.
Many people consider price discrimination not only as unfair but also unlawful. I also view it as unjust since a prodigal online shopping profile should not guarantee consumer exploitation by inflating prices. It would only be fair if they used it as an incentive by lowering costs for frequent customers. A customer would be disappointed to find out that an item he bought at $120 another person acquired it at $80.If companies must practice price customisation, the difference should be negligible to avoid exploitation accusations from customers.
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Companies benefit from price discrimination by increasing their profits as a result of price inflation for the elite class of customers. Moreover, they're able to serve the needs of both the lavish and price-sensitive consumers. For instance, Amazon may customise the prices of books to suit the purchasing power of students and lecturers. It would also be worthy of using price differences to award loyal customers. However, the demerit of price discrimination is a possible accusation of consumer exploitation.
