4 ms·

What I love about price discrimination is that sometimes you have to think through a few steps to figure out who the target demographics are, which makes it a s

What I love about price discrimination is that sometimes you have to think through a few steps to figure out who the target demographics are, which makes it a sort of game for me. Sometimes it's obvious (senior discounts), but often it's a little more indirect. One of my favorites: I drive a diesel, and every Monday Shell sells their diesel at a discount of $0.10/gal. I figure that they're trying to discriminate between businesses (the overwhelming majority of diesel drivers in the U.S.) and individuals: a long-haul trucker has to buy gas right when he needs it, and probably can't just put it off until Monday; I typically use slightly more than half a tank of gas each week, so I rarely need gas so badly that I can't put it off until Monday.

krschultz 16y ago
Though I would think if you want to get consumers rather than trucks, you would do it on Sunday becuase that is the day most truckers take off.
bmastenbrook 16y ago
The weekly diesel discount might also be a good way of attracting loyal customers from local businesses who operate diesel vehicles.
- Splines 16y ago
  Here's a thought: Could it be a form of weak lock-in? If you fill your tank on Monday, then you're less likely to fill up at that cheaper gas station on Thursday. When the next Monday comes around, you're probably going to need to fill up again, and well, there they are :)
ticktock 16y ago
I'm not 100% sure - but they probably discount the fuel because they are getting a delivery that night or next morning. There is a fixed delivery charge which essentially increases the price they pay per gallon for every gallon less they buy. The lowest cost price is achieved if the tank is empty. The customer discount serves as an enticement to those who don't need fuel, but could use a few gallons to top off. Someone on Empty is going to buy it regardless of the discount. The station is still making money and stands to make more if they can get the tank empty. The discount begins to work against itself if everyone waits until discount day to fill up, I suppose the station would recognize this and shift the delivery day to the new "slow" day.

krschultz 16y ago

Though I would think if you want to get consumers rather than trucks, you would do it on Sunday becuase that is the day most truckers take off.

bmastenbrook 16y ago

The weekly diesel discount might also be a good way of attracting loyal customers from local businesses who operate diesel vehicles.

Splines 16y ago
Here's a thought: Could it be a form of weak lock-in? If you fill your tank on Monday, then you're less likely to fill up at that cheaper gas station on Thursday. When the next Monday comes around, you're probably going to need to fill up again, and well, there they are :)

ticktock 16y ago

I'm not 100% sure - but they probably discount the fuel because they are getting a delivery that night or next morning. There is a fixed delivery charge which essentially increases the price they pay per gallon for every gallon less they buy. The lowest cost price is achieved if the tank is empty. The customer discount serves as an enticement to those who don't need fuel, but could use a few gallons to top off. Someone on Empty is going to buy it regardless of the discount. The station is still making money and stands to make more if they can get the tank empty. The discount begins to work against itself if everyone waits until discount day to fill up, I suppose the station would recognize this and shift the delivery day to the new "slow" day.