I am a bit contrarian on this. While I do agree that market segmentation maximizes revenue, I think that with regards of fairness, long term it is best that prices are the same worldwide.
The reason is because if someone in a poorer country gets a good at a lower price than someone on a richer country, that person will have less pressure to raise their prices to eventually reach real equality.
So the only real driver for segmentation for prices is to maximize revenue, not to be more fair.
I remember that before the EUR, the items in Zara stores had the prices in all European currencies (ESP, ITL, DEM, etc). It was simpler for production to just have one single ticket will all possible prices. If you made some algebra to compare actual pricing, you could see that prices were very different, but not because of fairness.
For example, at the time, the absolute value of a Zara product for Greece was above the absolute value of the same product in Spain. The GDP per capita of Greece was lower than the GDP per capita of Spain, but at the time in Greece Zara products were perceived as luxury items and in Spain were perceived as low cost, so Zara capitalized on that perception.
Maybe I am missing it, but I don't quite understand what 'fairness' has to do with cross market pricing. Different markets will constitute many variations in variables that will affect pricing. The cost of doing business in France is different than the cost of doing business in South Africa. The brand reputation of a McDonalds is different in China than it is in the US. I can go to almost any European country and buy groceries for cheaper than in the US, I have never thought "this is not fair".
The primary thought I have regarding pricing at grocery stores is, "Man, Safeway has these apples on sale for half the price they're selling for at QFC. I sure wish I could buy apples at Safeway and sell them to QFC."
Unfortunately, that's not how the world works. There's a bid and an ask. The bid for outside groceries is usually zero. But I still think about it.
Someday, Amazon will let us buy and sell items in their warehouses without taking delivery -- that'll be a good day.
> Someday, Amazon will let us buy and sell items in their warehouses without taking delivery -- that'll be a good day.
Maybe for the one doing the arbitrage. For the rest of the world, having every little purchase be akin to buying tickets to a concert or sporting event will be a nightmare.
That is how the world works. It is just that an individual buying at Safeway and selling to QFC will not have the reputation, scale, or timeliness to be able to make it worth QFC’s time and effort to buy from an individual.
There are lots of cases of arbitrage that come up but they usually get gobbled up pretty quickly. But usually the increased cost of operation across borders erases any gains you might get from it.
You don't have to go that far to see this effect. Grocery stores in two different neighborhoods of the same city can have wildly different pricing for the exact same product. A lot of times both stores will be owned by the same company and their shelves will be stocked by the same truck.
In this case you are usually paying more for the privilege of grocery shopping in a safer neighborhood around people with whom you feel more comfortable. That sort of pricing discrimination exists for a lot of other stuff, for example gasoline.
Most big grocery stores chains would have socioeconomically modeled and geographically analyzed their customer bases, and are aware of how much people are willing to pay for this sort of convenience.
I usually pay more to shop at Target rather than Wal Mart precisely because being in Wal Mart is miserable for about a dozen different reasons. I swear, they've even done something to the lighting in their stores in the last few years to make it worse. It's weirdly grey and dingy. I don't remember them being like that even 15 years ago, and it's not just one location, it's like some memo came down from corporate instructing them to make their stores feel as much like being in a county free-clinic waiting room as possible.
It's because Walmart isn't trying to compete with Target as a "browse around" store. They are trying to compete with Amazon, only it's self-warehouse work as well as self-checkout.
They do in fact purposefully keep their stores dingier then what the average big box store is.
To reassure value shoppers that a minimum percentage of the purchase price is going towards the facilities, thus making it self-evident that they are getting the best possible deal.
Whereas a better maintained store by definition cannot offer a lower price and still be profitable.
You don’t even have to go to different grocery stores. The same grocery store will use coupons to sell the same product at different prices to different people at different times.
The loyalty discount cards enabled them to mail you coupons specific to your purchasing habits, but the proliferation of apps has even further refined it to be on a day to day or even hour to hour basis with push notifications of coupons just for you in your app.
Kinda depends on product. If your price for each additional good is near zero (generate extra key for a video game) or very cheap (pretty much any SaaS), you have flexibility and can make it cheaper on some markets to be more competitive.
In case of software (video games are good example here) it might also move people from "just pirate it, $60 is my entire disposable income for this month" to buying from you
The reason is because if someone in a poorer country gets a good at a lower price than someone on a richer country, that person will have less pressure to raise their prices to eventually reach real equality.
So the only real driver for segmentation for prices is to maximize revenue, not to be more fair.
I remember that before the EUR, the items in Zara stores had the prices in all European currencies (ESP, ITL, DEM, etc). It was simpler for production to just have one single ticket will all possible prices. If you made some algebra to compare actual pricing, you could see that prices were very different, but not because of fairness.
For example, at the time, the absolute value of a Zara product for Greece was above the absolute value of the same product in Spain. The GDP per capita of Greece was lower than the GDP per capita of Spain, but at the time in Greece Zara products were perceived as luxury items and in Spain were perceived as low cost, so Zara capitalized on that perception.