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Disadvantages of price discrimination
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Disadvantages of price discrimination
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Price discrimination is part of the legal business strategy. It is occurring when companies charge different prices of the same goods and services to each customer or each type of customers to maximise profit based on the consumer 's price sensitivity and willingness to pay. It is not based on the cost of production, and it exists because different users place different values or prices on the same products. Therefore, companies can classify their customers based on the common traits and group them together to charge different prices. Firms are maximizing the producer surplus and changing the consumer surplus into supernormal profit. Consumer surplus is the difference between the maximum prices that the buyers willing to pay and the price they actually pay. Producer surplus is the difference between the minimum …show more content…
Products in amazon China are cheaper than amazon UK. Today, Firms Gather consumer 's information and buying habit then charge separately is considered as standard practices. Large online retailers can use cookies on their sites and get a lot of information about their customers like browsing history and location. Cookies are a type of message that the Web server give to a web browser that then stores the information for later use. For example, companies informed their previous customers about current discounts and offers through emails. The main purpose of cookies is to gather user 's information like user locations and present different version of the web pages according to the information received. However, companies need to implement privacy policy and do not share or sell customers information with others. For example, amazon.com will customise their advertisement based on browsing history of their website’s visitors. Each customer receives a different version of the website with different products recommendation and
Apart from Antitrust laws, there are several other laws that promote fair business practices. The Robinson-Patman Act prohibits price discrimination. This act ...
..., websites and online marketers do find ways around users’ precautions to gain personal information. There are many people out there who want to use personal information like credit card numbers or addresses to cause harm to others. These cases are the extremely negative ones that people want to and should avoid. The case of companies and third parties tracking browsing history and other information for advertising purposes hover over a finer line between good and bad. For some people, tracking can be considered convenient in terms of shopping for what they are interested in, and others may be uncomfortable with the thought of being tracked without knowing. As stated in the beginning, complete privacy is unlikely, but being informed about the tactics of the Internet can help one protect themselves and others in their care to be as careful and private as possible.
Advertisement agencies use behavioral advertisement, or third party cookies, to track customers on and off their client’s website. This allows them to create specific banner ads that display content viewed and not purchased, in hopes of getting a larger customer return and purchase rate. This practice is increasing among e-commerce and is raising concerns with ethical and privacy advocators.
The personal connection Americans have with their phones, tablets, and computers; and the rising popularity of online shopping and social websites due to the massive influence the social media has on Americans, it is clear why this generation is called the Information Age, also known as Digital Age. With the Internet being a huge part of our lives, more and more personal data is being made available, because of our ever-increasing dependence and use of the Internet on our phones, tablets, and computers. Some corporations such as Google, Amazon, and Facebook; governments, and other third parties have been tracking our internet use and acquiring data in order to provide personalized services and advertisements for consumers. Many American such as Nicholas Carr who wrote the article “Tracking Is an Assault on Liberty, With Real Dangers,” Anil Dagar who wrote the article “Internet, Economy and Privacy,” and Grace Nasri who wrote the article “Why Consumers are Increasingly Willing to Trade Data for Personalization,” believe that the continuing loss of personal privacy may lead us as a society to devalue the concept of privacy and see privacy as outdated and unimportant. Privacy is dead and corporations, governments, and third parties murdered it for their personal gain not for the interest of the public as they claim. There are more disadvantages than advantages on letting corporations, governments, and third parties track and acquire data to personalized services and advertisements for us.
Dobosz, Brian, et al. “Behavioral Marketing: Security and Privacy Issues.” Journal of Information Privacy and Security, vol. 2, no. 4, 2006, pp. 45–59., doi:10.1080/15536548.2006.10855803.
CBS News went undercover to investigate price discrimination due to gender. Not only are women paying more for retail ideas such as jeans, shoes, and personal care but also for services such as dry cleaning. Do not get me wrong, women’s clothing can be more expensive than a male’s, however routine services should be a flat rate to both genders. As of now there are no laws preventing this discrimination in retail therefore women’s products are getting taxed 1.5% more than men’s. I believe that companies think women are stupid and will not recognize that we are spending more money than we should be. I find it ironic that women are getting targeted to pay more for certain items and services when they get paid less at their work place.
The debate on whether price gouging is ethical or unethical has been ongoing. While laws in some nations have restricted the actions naming it ethical, some nations are deliberating on whether it is ethical or not. Price gouging is the act of the seller, pricing their goods or services at a price above the market rate when there is no alternative retailer available. The phenomena occur when the prices are sharply raised mostly temporarily when the demand is high. Price gouging is therefore as a result of an economic occurrence, but the name itself implies that someone is taking aggressive action against another (Lee 583).
To conclude, with the significance of e- business, consumer privacy becomes an important concern. The sales of consumer information and the lack of privacy awareness are the main causes of the privacy problem. The problem causes the harm to companies’ image, the troublesome to consumers, the loss of confidence in the rule of law and the increase in the awareness on privacy and respective solution are provided to tackle the consequences. Consumer privacy is an essential element in e-business. To further expand the utilization of e-business, each party should bear the responsibility to respect the privacy as to respect human rights.
Employees are not the only people whose information interest companies. To a far greater extent, businesses are looking to gather data on their users and the market in general. User data collection has become one of the most important components of market research. For example, online retailers can use data collected from a consumer’s purchase to target advertising on products that the consumer is most likely to buy....
...e same time, the time has come to raise consciousness, support research and standard-setting, and prepare model codes for those systems that do employ privacy-enhancing technologies. The opportunities for individuals to customize privacy preferences, research should be conducted to evaluate alternative arrangements should be generated. On top of that, the digital applications should provide transparent criteria, including ease of understanding, adequacy of notification, compliance with standards, contractual fairness and enforceability, appropriate choice of defaults, efficiency relative to the potential benefits, and integration with other means of privacy protection. Particular attention should be paid to uniformity of protocols across different industries and applications, so that consumers are not overwhelmed by a pointless diversity of interfaces and contracts.
However, the same personal data is being compromised and eroding privacy. Companies have been getting bolder in their attempts to gather, share and sell data. The latest trend is outsourcing data to third party companies for data processing, which can be done at a lower cost. One of the main problems with this approach is that a lot of very sensitive data is being sent, which could be harmful in the wrong hands. Most companies require their customers to "opt-out" to prevent their data from being shared with a company's affiliates. This process requires the customer to explicitly tell the company not to share their data, which is usually in the form of a web site or a survey sent in the mail. These surveys are often thrown away by consumers, so they don't even realize that they're giving the companies a green light to sell and share their data.
The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).
Many browsers keep track of where you have been on the Internet by using cookies. A cookie file is a small piece of information that a web server can store. However cookies are not without their problems. On...
Cookies are used to enable us to present appropriate messages to our customers. For example, to:
...try to ensure Internet security. More practically, marketers must try to target consumer groups more accurately. Minimizing unwanted consumer contacts may reduce the intensity and visibility of some dimensions of privacy issues. Last, marketing researchers must attempt to define privacy operationally. Much has been said and written about consumer privacy, but we still have little understanding of what information consumers consider private, why they consider it private, and whether this set of information changes situationally or in response to other factors.