As consumers, we all buy goods and services based on a multitude of factors, including price.

Consciously or subconsciously, we decide that a given price is worth paying for a product or service and the transaction takes place. Most times, we rely on a gut feeling, but there’s a lot going on in our minds behind every decision.

But most of us don’t realise that often we get charged not based on the value or the product or service but based on who we are and what we’re prepared to pay.

The same business may charge others less for the same solution because of their circumstances or attitudes.

This is the price segmentation strategy in action. In this article, you’ll learn why it’s important and how you can develop effective price segmentation in your business depending on the types of customers you serve.

What Is Price Segmentation? (Modern Brand Example)

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What Is Price Segmentation?

Price segmentation is part of brand strategy. It’s a strategy used by brands to charge different prices to different market segments for the same or similar products or services.

Although the solution of a brand has the potential to serve many market segments, often, the pricing of those solutions disregards some of those market segments.

This means that because of their rigid pricing strategy, they’re leaving money on the table and hindering their growth opportunity.

Price Segmentation Examples

Price segmentation is nothing new. It’s a strategy that’s been used for generations.

You see this strategy in action in both product or service industries across, entertainment, fast-food and even software.