Global and regional pricing Research Paper Example | Topics and Well Written Essays - 250 words

Global and regional pricing - Research Paper Example The rationale for charging different prices, based on the specific regions, is that a particular region may demand businesses to charge a lower price for their products, while another location may require higher pricing due to the quality or reputation of the product. A person travelling from Tampa to Miami using a personal car will always discover that the price of Gasoline varies depending on the distance from the main highway, with higher prices being charged close to the highway and lower prices far away from the highway. Similarly, retail stores in the same locality may charge lower prices, for same products on the store floor, in different regions as a way of increasing sales volume from stocks that are not moving, improve store traffic or compete directly with different stores and retail chains. Differential regional pricing is therefore dependent on the popularity of the product, the competitiveness of the product and demographic characteristics of the customers in the differ ent regions. Price discrimination entails charging different prices for the same product or a variation of the same product, in different countries. Microsoft Corporation has emerged as a monopoly in the development and sell of computer software and programs. The company offers several versions of the Microsoft office program, which are priced differently, based on the various categories of consumers, including businesses, academia and personal computer users. Through price discrimination, Microsoft separates its consumers and charges different prices with the goal of capturing customer surpluses and optimizing its profit margins. Microsoft has been accused of charging different prices to the different consumers of the same product. Popa (2012) observes that Microsoft, Apple and Adobe face risks of legal proceedings due to their