Some pricing strategies explicitly manage scarcity, time, or customer differences to extract more value. Yield management is the practice of adjusting prices to allocate a fixed, perishable capacity (such as airline seats or hotel rooms) among different customer segments in order to maximize total revenue. It rests on the same underlying logic as price discrimination, which is the practice of charging different prices to different customer groups for essentially the same product.
For price discrimination to succeed, three conditions must be met: the firm must have market power, it must be able to segment the market into groups with different willingness to pay, and resale between segments must be prevented. Within these conditions, three forms are usually distinguished. First-degree, or perfect, price discrimination charges each individual customer their maximum willingness to pay. Second-degree discrimination charges different prices based on the quantity purchased or the version chosen, so bulk discounts and product tiers are common examples. Third-degree discrimination charges different prices to distinct groups, such as students, seniors, or customers in different geographic regions. Two-part (two-part tariff) pricing extends this logic by combining a fixed access fee with a per-unit variable fee, as in a gym membership plus per-class charges.
Several specialized approaches apply the same customer-segmentation logic to specific contexts. Peak (or off-peak) pricing charges higher prices during high-demand periods and lower prices during low-demand ones, smoothing load and capturing additional surplus. Geographic pricing adjusts prices by the customer's location, region, or country. Transfer or FOB pricing refers to prices charged between divisions of the same company, frequently used in international trade, while export pricing is the price a manufacturer charges for goods sold to a foreign market.