Customer Segmentation
Different customers value the same product differently, so firms separate them into groups and offer distinct prices, bundles, or buying paths. The separation can capture willingness to pay, but visible differences risk appearing unfair.
Two people can approach the same product and face different effective prices—not because the product changed, but because the seller has placed them in different customer segments.
E1Turn one market into several
Customer segmentation divides buyers into groups whose willingness to pay differs. Instead of choosing one price for everyone, the firm designs a distinct offer, bundle, or effort barrier for each group: customers who value the product more retain a higher-priced route, while more price-sensitive customers receive another way to buy. This is the operating structure behind price discrimination, with segmentation providing the categories through which different effective prices can be delivered.
E1Segmentation does not make unfairness disappear
Grouping customers may make price differences more acceptable, but it does not settle whether those differences are fair. If buyers can see that comparable customers pay differently—or feel they have been sorted manipulatively—the extra revenue can come at the cost of trust.
Map the offer before changing the price
For one product, identify two customer groups with meaningfully different reasons for buying. Design a distinct bundle or purchase path for each, then check whether you could explain the difference openly without sounding arbitrary.
Episodes that teach this
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Why We Pay More Than Others? Product Pricing Psychology | Future IQ
· explained at 10:41
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"It is called customer segmentation... customer segmentation remember that word"