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I would say it's a way of price segmentation. One example are loyalty cards with rebates and bonuses. Customer A pays less for the same product than customer B.
by _nalply 4y ago
I would say it's a way of price segmentation. One example are loyalty cards with rebates and bonuses. Customer A pays less for the same product than customer B. Of course there's the difference that customer B has seat heating enabled, but from the producers' perspective this doesn't matter a lot, because they have the same production process for everybody, somewhat similar to CPU binning.
It's a way for companies to extract more revenue. They hope that customers don't mind too much that they are segmented into groups.
But they do. They feel hurt and outraged if they discover that they paid more than the neighbor for the same product or if the product could be elevated to a higher level at no cost for the producer if only someone had the right key. Companies then try to be clandestine, to mollify customers with cheap added value or offering opt-in by a complicated process for free (loyalty cards, coupons, rebates with conditions, and so on).
It's a fundamental conflict between producers and consumers.
If you want a perfect market economy price segmentation should be avoided. It causes confusion for customers and therefore prevents price transparency. It enables rent seeking by companies.