Megan McArdle has an
interesting piece on Groupon and pricing discrimination:
Coupons basically serve two functions for businesses--
advertising, and price discrimination.
Advertising means it brings in new customers by making them aware of
your service, or giving them an incentive to try it. Price
discrimination, on the other hand, is what food processors do with
grocery store coupons: it lets them sell their products to customers who
are very price sensitive, without lowering the price paid by people who
are too busy or embarassed to clip coupons.
As far as I can tell, small businesses viewed Groupons largely as the former....
The problem is that for consumers, it seems mostly to have been about price discrimination....
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