Price Discrimination Strategies Research Articles

Serving the unserved: a market segmentation, price discrimination based customer-centeric approach to home loans in india

The housing finance sector in India has witnessed remarkable growth in recent years, yet a significant portion of the population remains excluded from accessing formal home loan facilities. This master thesis report aims to address this gap by proposing a customer-centric approach to home loans, utilizing market segmentation and price discrimination strategies to serve the unserved segment of the market effectively. The study begins by identifying the need to bridge the gap in home loan accessibility and explores the reasons behind the exclusion of certain demographic groups. Through a comprehensive literature review, the report examines existing research on home loans, market segmentation, price discrimination, and customer-centric approaches in the financial services industry. The research methodology employed in this study utilizes a mixed-methods approach, combining qualitative and quantitative techniques to gather insights into the preferences, challenges, and perceptions of potential home loan borrowers. A carefully designed sampling plan ensures the representativeness and reliability of the data collected. Data analysis reveals patterns and trends within the home loan market, shedding light on the effectiveness of different segmentation and pricing strategies in reaching the unserved population. The questionnaire used for data collection is provided in the report, along with a discussion of the limitations, challenges, and barriers encountered during the research process. In conclusion, the report summarizes key findings and recommends strategies for policymakers, financial institutions, and other stakeholders to enhance inclusivity and efficiency in the home loan sector. By adopting a customer-centric approach and leveraging market segmentation and price discrimination techniques, the goal of serving the unserved can be achieved, contributing to greater financial inclusion and societal welfare.

Research on Nash Equilibrium of Dual-Channel Supply Chain Based on Wholesale Price Discrimination and Sales Efforts

The progress of communication technology and the Internet has made the dual-channel supply chain have great development. Supply chain members have to compete and cooperate with other enterprises on the chain in order to obtain greater self-benefit. In the competitive-cooperative relationship among enterprises, price discrimination and sales effort are common tools of operation, and Nash equilibrium theory is a common strategy in the process of supply chain game. Whether manufacturers can promote retailers to implement sales efforts through price discrimination and ensure that the overall revenue of the supply chain is improved at the Nash equilibrium is great significance to both the supply chain and individual enterprises. This paper constructs a decentralized dual-channel supply chain mathematical model composed of an independent manufacturer, an offline retailer, and an online retailer, taking into account the impact of the offline retailer’s sales efforts on his demand and its positive external for the other channel. The revenue matrix of retailers’ decisions about whether or not to pay their sales efforts is built under the condition that manufacturers charge different wholesale prices to different retailers and solves the condition of every decision combination becoming the Nash equilibrium using the Nash equilibrium game theory. Finally, the optimal pricing strategy of the manufacturers is analysed to get the constraints of this dual-channel supply chain achieving Pareto improvement when manufacturer uses wholesale price discrimination strategy.

Analysis on the Development Strategy of Starbucks' Layout in Third and Fourth Tier Cities in China

Recent surveys found that the stores of Starbucks are mostly located in first and second tier cities in China and its objective customers are high income earners. However, in its 2025 expansion plan, the main objective of Starbucks is to enter low tier cities in China due to the high consumption potential in those cities. In order to help Starbucks achieve its plan, this paper will use the SWOT model to analysis internal strength and weakness, external opportunities and threats of Starbucks. The paper found that Starbucks has high user viscosity, strong monopoly power and financial capacity. Besides, the economic conditions in low tier cities are also beneficial to Starbucks such as low cost on daily life bringing out higher level of disposable income and increasing demand for coffee. In the contrast, we found that Starbucks has several problems such as inefficient chain of command, cost pressure due to large investment on digital technology and poor product differentiation. Whats worse, there is fierce battle among other brands and undeveloped consumption concept in the low tier cities. According to the analysis above, we suggest that Starbucks should adopt some strategies such as price discrimination strategy, making product differentiation, increasing investment in digitization and new retail, enhancing the brand influence, seeking for new suppliers with lower prices, shutting down underperforming stores and making improvement on quality of product, service and environment.

Optimal Upgrading Strategy for the Quality, Release Time, and Pricing for Software Vendor

Software vendors often upgrade their software products in order to against rapid changes in the market. However, software vendors must often ensure a balance in the upgraded products of the early-release-but-low-quality and high-quality-but-late-release categories. In this article, we explore the optimal release strategy, quality design of an upgraded version, and optimal prices for a software vendor by constructing a two-period model under two different price discrimination strategies: the behavior-based pricing strategy (BBPS) and hybrid price discrimination strategy (HPDS). The optimal pricing strategy adopted by a software vendor depends on the quality of the initial version of the software. Specifically, if the quality of the initial version is lower, the HPDS is beneficial for the software vendor; otherwise, the software vendor can preferably adopt the BBPS. Moreover, under the HPDS, the optimal market coverage is invariably higher regardless of the quality of the initial version of the software, and consumers always receive a higher surplus, except when the research and development cost and speed are relatively lower under the lower quality of the initial version of the software. In addition, whether the quality of the initial version is higher or lower, the early-release strategy always leads to a higher profit for the software vendor.

Production quality and pricing strategy for substitutable products under comparison effects

Comparison effects have been studied extensively in many fields. In particular, existing operations management articles have discussed the impact of comparison effects on enterprises' production and pricing decisions. Research has also shown that consumers' purchasing decisions are primarily determined by three factors: product quality, selling price, and comparison effects. The current study introduces the concepts of social and temporal comparison effects to examine how comparison effects influence a monopolist’s production quality and pricing strategy for substitutable products. Results reveal the following: (1) Setting different prices for even two types of substitutable products with negligible quality differences can divide customers into three groups under the influence of social comparison effects in a single-stage model. (2) The monopolist should avoid using a price discrimination strategy in which products with a short market life cycle have the same quality but different prices. (3) When the market life cycle of products is sufficiently long in the single-product market and the market with two substitutable products, the monopolist’s optimal choice in the second stage is to keep production quality constant and increase the selling price. Consequently, the number of buyers does not decrease because of temporal comparison effects. Therefore, the firm increases its revenue. (4) For the market with two substitutable products with quality differences, one approximate optimal strategy for the enterprise in the second stage is to keep the selling price constant with the assumption that product quality cannot be adjusted after the first period. At this point, the consumption situation in the market is the same as that in the first stage. Therefore, when no external constraints exist, the monopolist firm can obtain more benefits in the second stage than in the first stage by exploiting the temporal comparison effects of consumers in the second stage. (5) When consumer identity information can be confirmed in the market, social comparison effects, similar to temporal comparison effects, could help the enterprise increase its price and profit while maintaining product quality. These social and temporal comparison effects constrain consumers. Thus, the number of people who continue to buy products does not decrease.

Intertemporal Price Discrimination via Randomized Promotions

Problem definition: The undesirable but inevitable consequence of running promotions is that consumers can be trained to time their purchases strategically. In this paper, we study randomized promotions, where the firm randomly offers discounts over time, as an alternative strategy of intertemporal price discrimination. Methodology/results: We consider a base model where a monopolist sells a single product to a market with a constant stream of two market segments. The segments are heterogeneous in both their product valuations and patience levels. The firm precommits to a price distribution, and in each period, a price is randomly drawn from the committed distribution. We characterize the optimal price distribution as a randomized promotion policy and show that it serves as an intertemporal price discrimination mechanism such that high-valuation customers would make a purchase immediately at a regular price upon arrival, and low-valuation customers would wait for a random promotion. Compared against the optimal cyclic pricing policy, which is optimal within the strategy space of all deterministic pricing policies, the optimal randomized pricing policy beats it if low-valuation customers are sufficiently patient and the absolute discrepancy between high and low customer valuations is large enough. We extend the model in three directions. First, we consider the case where a portion of customers are myopic and would never wait. We show that the existence of myopic customers is detrimental to the firm’s profitability, and the expected profit from an optimal randomized pricing policy decreases as the proportion of myopic customers in the population increases. Second, we consider Markovian pricing policies where prices are allowed to be intertemporally correlated in a Markovian fashion. This additional maneuver allows the firm to reap an even higher profit when low-valuation customers are sufficiently patient by avoiding consecutive promotions but, on average, running the promotion more frequently with a smaller discount size. Lastly, we consider a model with multiple customer segments and show that a two-point price distribution remains optimal, and our conclusion from the two-segment base model still holds under certain conditions that are adopted in the literature. Managerial implications: Our results imply that the firm may want to deliberately randomize promotions in the presence of forward-looking customers. Funding: This work was supported by the National Natural Science Foundation of China [Grant 72201124], the Natural Sciences and Engineering Research Council of Canada [Grants RGPIN-2015-06757 and RGPIN-2021-04295], and the Youth Project of the Humanities and Social Science Foundation of the Ministry of Education of China [Grant 22YJC630006]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2023.1194 .

Do telecommunications prices depend on consumer engagement?

This paper analyzes how customers’ heterogeneous search and switching habits affect the prices paid for telecommunication services in a context in which operators use price discrimination strategies to retain their customers and attract those of their rivals. Drawing on a representative sample of Spanish households (N=3,113), we show that engaged consumers pay 9.4% less than completely unengaged consumers for their telecommunication services, after controlling for the characteristics of the bundle of services contracted. We also find that highly engaged consumers (i.e. those that have called their operator to obtain a better deal and who have switched to a different operator at least once) pay 13.6% less for their services than unengaged consumers, that consumers who have switched operator at least once pay 8.4% less, and that consumers who call their operator to request better conditions for their contracts pay 5.8% less. Finally, we show that the excess price paid by unengaged consumers increases as they contract more sophisticated services, such as premium television content and additional mobile lines.

Channel structure of E-platform encroachment

This paper focuses on the supply chain consisting of a manufacturer, a third-party (3P) seller, and an e-platform, while the 3P seller sells products through the e-platform. If the e-platform not only provides a sales channel for the 3P seller, but also determines the retail price and then sells products directly, we call it e-platform encroachment, which creates price competition between the 3P seller and e-platform. We find that the encroachment benefits the manufacturer and e-platform but hurts the 3P seller. And both the manufacturer and 3P seller prefer the price discrimination strategy to the uniform pricing strategy, while the e-platform does not necessarily. The price discrimination strategy encourages the manufacturer to offer the 3P seller a preferential wholesale price as the compensation and to curb the competitive advantage of the e-platform. The two pricing strategies have the same total sales quantity but different allocations across channels. Moreover, we propose a new coordination mechanism to reduce the double marginalization effect and improve supply chain performance. In extensions, we demonstrate numerically how the e-platform should decide the commission rate and compare the e-platform encroachment model with the manufacturer encroachment model to reveal the impact of different encroachment roles on all parties in the supply chain.

Distance-Based Service Priority: An Innovative Mechanism to Increase System Throughput and Social Welfare

Problem definition: The main goal of many nonprofit or nongovernmental organizations is to increase the number of customers who receive service (i.e., service coverage) and social welfare. However, the limited number of employees, volunteers, and service locations results in long service wait. In addition, getting customers living in remote areas to receive services by traveling long distances is difficult. We propose an innovative distance-based service priority policy that would reduce the service waiting time for customers who must travel farther for the service by giving them higher service priority, thereby providing them with a new incentive to seek service. Methodology/results: Using a game-theoretic queueing model, we show that the proposed policy can significantly attract more customers to a service. The increase can be up to 50% compared with the ordinary first-come-first-served service discipline. The policy can also achieve higher social welfare, however, that may come at the cost of reduced customer welfare. We therefore propose a possible remedy for a social planner to coordinate welfare under such circumstance. It ensures all stakeholders, including the service provider, customers, and society, can benefit from the policy at the same time. Finally, we compare our distance-based service priority policy with two existing strategies from the literature—namely, the price discrimination strategy and the probabilistic priority strategy. Managerial implications: Our proposed policy can play a pivotal role in a nonprofit service provider’s mission to increase service coverage and social welfare, especially when customers’ travel costs to obtain service are significant. Furthermore, our policy may create fewer implementation and fairness concerns compared with related strategies. Funding: Z. Wang acknowledges financial support from the National Natural Science Foundation of China [Grants 72001118 and 72132007], and L. Fang acknowledges financial support from the National Natural Science Foundation of China [Grant 72271129]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1157 .

The Characteristics of the Housing Market and the Goal of Stable and Healthy Development in China’s Cities

This paper constructs a mathematical model to study China’s urban real estate markets, in which there are different types of demands from house buyers, and housing suppliers adopt the strategy of quality differentiation second-degree price discrimination. Our theoretical result shows that, in China’s case, without government intervention in the housing market, it is almost inevitable that the prices of both housing and the related resources will rocket. To achieve the goal of “houses built for inhabitance”, we put forward a policy scheme to achieve “houses built for inhabitance” in China’s cities from the perspectives of “speculation limitation” and “price control”. We also conduct a numerical analysis to consider the macroeconomic effects of these two policy solutions on the housing market, and we conclude that Chinese authorities should introduce a resale tax in the housing market and learn from Singapore’s experience in housing market regulation.

SSSL: Secure Search Space Locking of Behavioral IPs

Raising the level of VLSI design abstraction from the Register Transfer Level (RTL) to the behavioral level has multiple advantages: (i) It reduces the turn-around-time, (ii) allows faster verification and (iii) extends the re-usability of the design as High-Level Synthesis (HLS) automatically re-optimizes the synthesized circuit when new process technologies are available by simply selecting a different technology library. Moreover, HLS makes extensive use of synthesis directives that control how to synthesize mainly loops (unroll or pipeline), arrays (register or RAM) and functions (inline or not). This further increases the re-usability of the behavioral code as it enables the generation of micro-architectures with different area vs. performance trade-offs. These advantages open the door to third party IP (3PIP) vendors providing Behavioral IPs (BIPs). Unfortunately, the market of third party BIPs is still very small and mostly limited to the HLS vendors themselves. Being so flexible is also their main weakness as it makes them only economically viable if the BIP provider can charge a large premium as it is highly unlikely that the BIP consumer will require their service again. Traditional IP vendors discriminate the price of the IP based on the amount of flexibility of the IP, e.g., RTL description vs. providing a synthesized gate netlist. We envision a similar price discrimination strategy for BIPs by limiting the re-usability of the BIP by partially encrypting the BIP source code. The main idea is to limit the search space, and hence, the re-usability of the BIP such that it only allows the BIP consumer to generate micro-architectures within a pre-defined search space range. This is accomplished by selectively fixing some of the synthesis directives in the form of pragmas at the source code while leaving others explorable. By encrypting the portion of the BIP that contains the fix pragmas we can guarantee that no designs outside of the pre-defined search space are generated. We believe that this work could serve as catalyst to grow the BIP market.

Price Discrimination with Fairness Constraints

Price discrimination strategies, which offer different prices to customers based on differences in their valuations, have become common practice. Although it allows sellers to increase their profits, it also raises several concerns in terms of fairness (e.g., by charging higher prices (or denying access) to protected minorities in case they have higher (or lower) valuations than the general population). This topic has received extensive attention from media, industry, and regulatory agencies. In this paper, we consider the problem of setting prices for different groups under fairness constraints. We first propose four definitions: fairness in price, demand, consumer surplus, and no-purchase valuation. We prove that satisfying more than one of these fairness constraints is impossible even under simple settings. We then analyze the pricing strategy of a profit-maximizing seller and the impact of imposing fairness on the seller’s profit, consumer surplus, and social welfare. Under a linear demand model, we find that imposing a small amount of price fairness increases social welfare, whereas too much price fairness may result in a lower welfare relative to imposing no fairness. On the other hand, imposing fairness in demand or consumer surplus always decreases social welfare. Finally, no-purchase valuation fairness always increases social welfare. We observe similar patterns under several extensions and for other common demand models numerically. Our results and insights provide a first step in understanding the impact of imposing fairness in the context of discriminatory pricing. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: A. N. Elmachtoub was supported by the Division of Civil, Mechanical and Manufacturing Innovation [Grants 1763000 and 1944428]. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4317 .

Estimating financial information asymmetry in real estate transactions in China - An application of two-tier frontier model

This study applies the two-tier stochastic frontier model to estimate the distribution of housing transaction information in Hangzhou, Wenzhou, Ningbo, and Jinhua (four cities in Zhejiang Province, China) during the year 2018, to analyze the difference in the price information acquired by the buyers and sellers in the transaction, and the effect of information asymmetry on the transaction price. The empirical results show that in each city, during the housing transaction process, the supplier has more complete information about house prices than consumers, and can therefore implement price discrimination strategies in setting service prices. Due to the disadvantage in acquired information, consumers on average need to pay a price 4.86% higher than a reasonable transaction price. In addition, the information asymmetry problem in urban areas is relatively more serious than in other areas. In terms of comparisons between cities, Hangzhou had the largest net surplus in the housing transaction market, followed by Jinhua, Ningbo, and Wenzhou.

Socialize More, Pay Less: Randomized Field Experiments on Social Pricing

We propose social pricing, a novel pricing framework under which consumers with higher social capital enjoy a better price. Conceptually, social pricing enables firms to achieve price discrimination based on a consumer’s social value. This is in sharp contrast with traditional price discrimination strategies where price differentiation typically hinges on consumers’ personal value. We design and conduct two randomized field experiments on a leading online fresh food retailer to understand the value of social pricing. Social pricing has been commonly credited for its effectiveness in new customer acquisition. Interestingly, our study reveals that it is also highly effective on existing consumers. Our analysis shows that social pricing can increase an online retailer’s profit by 40% solely from existing consumers, compared with regular firm-offered discounts. Exploration of the underlying mechanisms reveals that perceived engagement and social cost are the main drivers, which not only help to increase purchasing frequency but also induce higher order value per purchase. In a follow-up experiment, we vary the rules of social interactions by requiring heterogeneity in consumers’ purchasing frequencies. The results suggest that a heterogeneity-based strategy can further amplify the benefits of social pricing.

STRATEGI ALTERNATIF PENETAPAN HARGA DENGAN PENDEKATAN DISKRIMINASI HARGA UNTUK MENINGKATKAN VOLUME PENJUALAN CAFÉ SEMANIS KAMU

This research was conducted at Café Semanis Kamu which aims to find out the right alternative strategy used to increase sales volume. This research was conducted with a descriptive qualitative method with sources of information obtained by interviews and literature study. The data analysis method uses an approach Internal Resources Based Analysis, VRIN Analysis (Valuable, Rare, Imitability, Non-Substitution), Sustainable Competitive Advantage (SCA) Analysis, and TOWS (Threats, Opportunities, Weakness, Strengths) Analysis. The results of data processing with this approach formed a price discrimination strategy with two program proposals, namely making package & reservation catalogs, and making special discounts.

A quasi-experiment in international student mobility: Germany’s fee re-introductions

ABSTRACT We analyse Germany’s re-introductions of tuition fees and enrolment of international students. Fees could not be levied before the German Federal Constitutional Court sanctioned them in 2005 and only seven out of the sixteen states took action, thus making a quasi-experimental research design available. Our fixed effects and synthetic control estimators measure the effect of fee-reintroductions on international enrolments. Results reveal that only one state significantly reduced its foreign student intake while the remaining fee-reintroducing states did not lose foreign students. Findings expand upon prior studies conducted on German students and contribute to the debate concerning optimal student taxation policy. A price-discrimination strategy might be available, but its desirability must be more broadly acknowledged in the greater scheme of higher education financing. A theoretical framework is laid out to contextualise the role of tuition fees in international student migrations and fee-subsidy systems.

Mobile Internet usage and usage‐based pricing

AbstractUsing data on mobile Internet usage of thousands of individuals, we provide some of the first analyses linking mobile usage to key demographics such as income. We find a reverse‐U relationship between mobile Internet usage and income—notably different than the monotonically declining relationship found on home devices. This pattern suggests that data caps are particularly binding on low‐income users. We then construct a simple model of mobile Internet usage that incorporates demand features suggested by our empirical finding and prior empirical findings on device adoption and usage. After abstracting away from cost and two‐sided market considerations, we solve the model, and through comparative statics, identify demand conditions for which usage‐based pricing (via a data cap) is, or is not, revenue enhancing. Key insights from this analysis are: (1) the tendency toward demand‐driven price discrimination is hill‐shaped (increasing then decreasing) in the number of low‐income users and eventually declining in high‐income users, and (2) a relatively high (low) proportion of total value attained from relatively low usage levels by low‐income (high‐income) users increases the tendency toward demand‐driven price discrimination. Hence, to the extent that a market has a large number of low‐income users and/or high‐income users attain a higher proportion of their total value at the cap than low‐income users, the use of caps by providers is more likely driven by cost (or other non‐demand‐side) considerations than by revenue enhancement. Lastly, additional analysis shows a largely monotonically increasing relationship between income and usage intensity (measured as page views in a session), suggesting that, ceteris paribus, price discrimination strategies may be more effective if tied to usage intensity rather than duration.

The optimal pricing model of online knowledge payment goods in C2C sharing economy

PurposeThe purpose of this paper is to research the price strategies of online knowledge payment product by considering network externality in the C2C sharing economy.Design/methodology/approachConsidering the characteristics of online knowledge goods and the social network externality of consumers, this study establishes a consumer utility function. On this basis, a multistage game pricing model of online knowledge products is established based on three kinds of network price strategies under a completely competitive market structure. It also analyzes the influence of consumer social network structure and consumer utility on online knowledge product pricing and producer profit, as well as the influence of consumer quantity and discount rate on pricing strategy.FindingsThe consumer social network and consumer utility affect the pricing of online knowledge product under different price strategies. In the growth period of the platform, adopting the price discrimination strategy, the profit of producers is significantly higher than that of other price strategies, and producers should choose effective price strategies for reasonable pricing in combination with their own sales objectives.Originality/valueThis study enriches the literature on the pricing model of online knowledge payment product and owns a practical significance to guide the knowledge producers’ marketing strategies to increase profit.

ОСОБЛИВОСТІ ТА ПСИХОЛОГІЯ ЦІНОУТВОРЕННЯ БРЕНДІВ: МАРКЕТИНГОВИЙ АСПЕКТ

With the aim of providing the enterprise’s profitability there is an actual problem of searching the effective marketing technologies that would promote the value of commodity for consumers. It is important to point effort at brand capitalization, using totality of marketing instruments; one of basic aspect is price. The essence of brand pricing and brand value as an important constituent of price politics taking into account the marketing and expense approach to pricing is considered in the article. Essence of brands pricing, main purposes of the enterprises, that produce brands, their varieties and methods of achievement, is considered. The row of key factors that directly influence on brand cost and its value for consumers is set. The basic approaches to the process of forming the price of branded commodity, their strengths and weaknesses is proved. The basic differences of brands pricing from ordinary trademarks, the basic constituents of successful brand, their structure, role and influence, are analyzed on the consumers’ decision are established. The value of brand equity, its description, advantage of brand possessing, and also influence on pricing on the whole is investigated. The basic categories of brands depending on price and quality of commodity, their value for consumers were determined. The process of price setting on the branded commodity that consists of some basic stages they are: determination of commodity cost taking into account the charges on producing goods and minimum mark-up; prices coregulation to the standard of prices of commodities-analogues from firms-competitors; determination of size of extra charge for unique trade suggestion, that commodity contains; determination of extra charge for marketing possibilities of company and degree of possessing the channels of distribution; adding to the price a certain price bonus for a brand. The types of strategies that are used for brand pricing taking into account the selected method of its positioning at the market and aims of pricing are established: strategy of skimming; strategy of cost penetration; strategy of stable prices; strategy of price discrimination; strategy of price leadership and others, and also their descriptions and separate features are considered. The influence of such factor as loyalty of consumers on forming the branded cost of commodity is shown. Psychological methods that are needed to be used for forming and adjustment of brand price that will give an opportunity to promote profitability of enterprise activity, retain and fix market positions of the enterprise and its brands are generalized.

Segmentation of theatre audiences: A latent class approach for combined data

Theatrical productions are supposed to be perishable good, since the tickets for a particular play cannot be inventoried and sold after a time of play. In the revenue management of a perishable good price discrimination is widely used. Since the theatre audience is heterogeneous in terms of visit purpose, ability to perceive quality, willingness-to-pay, the strategy of price discrimination is developed in the context of theatre segments. In this paper, we segment consumers of Perm Opera and Ballet Theatre and propose marketing and pricing instruments to manage theatre revenue. Since development of detailed price discrimination strategy requires data on consumer's purchase history, her behavioural and socio-demographic characteristics, we collect and combine two data sources: data on ticket purchases and data obtained from discrete choice experiment. We modify latent class logit model for joint revealed and stated preferences data where data on consumer characteristics is only partially observed and employ the model to segment the audience. We identify four segments of the theater's audience. The study reveals theatregoers segments with different willingness-to-pay for performance and seat location characteristics. Segmenting allows to develop detailed recommendations on the pricing strategy for various theater audiences.