Pricing experiments are conducted with Porter's Five Forces in mind. And thanks for the reminder about the time value of money. 🙂That's why I only watch informative channels like yours on TH-cam, and I watch them at 1.75x playback speed.
Very well explained 👍🏼 If anyone wants to sell large quantities of stocks in stock market, you know that all stocks are sold at different prices. You can't sell everything at same price as different number of people are ready to buy at different price (demand curve). Differential pricing is very natural when dealing with stock market. Similar economics comes in play when selling large quantity of goods or services.
Hmm, I wonder if the stock market can be thought of as (a very volatile) form of differential pricing... Because this kind of differential pricing is not from a customer segmentation perspective, IMO. You can't give out discount codes to some buyers now, can you? That's why I feel it's purely demand-supply mechanics in action. But I am not well-versed in this subject, so I might be totally wrong! :) - Shrikant
Oh yeah, good example! Except, rigorous application of information-asymmetry is needed here to ensure the car-owner doesn't get pissed... 🤣🤣🤣 - Shrikant
Naveen is highly intelligent person, he knows about almost every fields. People are desperate meeting celebs , and since childhood I was never ever desparate to meet any celebs, but truely I would like to meet people like Naveen, he is highly intelligent and blew my mind. I mean kaise kar lete hain aap?
This question will be (sort of) answered during the livestream we are doing this coming Friday - set a reminder if you want to know the answer! ;) - Shrikant
Hey side question, a fellow TH-camr here (Not as good as you both in any manner tho), was wondering about the equipment you use, especially the mic you have on you, also the camera equipment, editing software, and probably a much more invasive question, how much do you spend on a video typically?
Oh, this is a tangled question because a lot of the stuff that makes this channel happen is actually intangible... We'll try and address this in the live episode we are doing this Friday! :) - Shrikant
basically its value addition to the product but the value is defined by you and its not unethical if you value the speed/quality/ease of doing it/social status etc because you can always go find another option in this free world *if you are willing to* or just accept its their work to make some profit accordingly to the costumer base and the fact that it works for them proves the world is okay with it
Really good summary! The rest of the video is a longer and more detailed exploration the intricate nuances of the categorization you've listed in your comment! Thanks so much! :) - Shrimant
Srikant has it right when he questions the morality of this practice. This is a straightforward ethical question if we exclude what-aboutery of normalised exploitation. PhDs and MBAs spent on how best to fleece people...smh. If the only moral we can spot here is how to minimise your personal cost, rather than a relook at this corrupt economic system then it is our morality and basic humanness we need to reconsider. Every child knows the answer to which is the better, desirable and more sustainable option- self- interest or universal wellbeing. Everyone turning to self- interest turns us into cancers. Which is what we have become to this planet and one another. If everyone was paid the same profit margin in addition to their cost price, then no one would be exploited and anyone could earn and pay for any product based on their physical ability to produce and add value to goods. If no one is exploited, no one needs charity. Yes, there won't be any scope for infinite growth of profits in such a system but is that really the best goal we can set for humanity? Maximising Profits?
Companies are trying to maximize profits. But customer segmentation allows them to provide right value to customers. I would say rather fixed price to all income category seems unethical. Some people don't't mind extra cost just to reduce some hassle and save time. This allows seller to sell at lower margin to people who can't afford much. Some practices like taking benefits of customer desperation are unethical. Differential pricing in itself is not. Another example is use of satche packets for shampoo/soap/ketchup etc. They give better value for money, but people who can spare little extra buy bottles though it's costly. Cause having bottle is convenient in so many ways.
@gsmrg the question is why some people are unable to afford basic amenities in our societies while others live in extreme luxury. The question on profit maximization is a question on income inequality in capitalistic societies that has only widened in history. Subsidies won't be needed of everyone is equally empowered. If our farmers, cobblers, artisans and domestic help began to charge the the true value of their labour they would be able to easily afford the cost price+reasonable profit of regular shampoo bottles too.
@@c.Drishta Because they do not deserve. Poor people vote for Brahmavad and then get a beef ban, which results in poor nutrition and stunted children. People can afford it, but what if that option is itself not available? Labor has to be cheap for cheap production; farmers are not innovators or agriculturists. You do not need humans or animals for the things that can be done by machines. India per capita income has increased by 3 times in the last 2000 years. You lack a basic understanding of economics. You make products cheap by exploitation.
but then you pay in security of your device and the time taken for you to find the apk or the ads you saw on the modified apk website again nothing is free in this world
It is ethical. It allows seller to sell at lesser margin to people who can't afford it. Idea is to provide service to people based on what they perceive worth of the goods/services. People earning like 40 lk per annum will believe TH-cam premium is dirt cheap..it's not worth to go through hassel of advertises. People earning 2 lk per annum definitely see free version worth it and ok to listen few ads. Unethical are some practices like taking benefits of customer desperation, or creating false sense of urgency or scarcity. But that's not really about customer segmentation. These practices would scam everyone irrespective of real buying power.
@@vinsin328 Up till 2020, youtube made all its revenue through advertisements and the content was freely accessible to all users. We also have the examples of other free-access web resources that do not require paid subscriptions in order to remain functioning. E.g., Wikipedia, Internet Archive, Mozilla(!), TED Talks, to name a few. Even Khan Academy was completely free for the longest time. And in a world where profit is not the end-all goal for all organisations and endeavours, surely we can come up with even more creative ways to publicly sustain organisations without resorting to psychological gimmicks used to manufacture demand for 'premium' and 'exclusive' versions of the same exact goods. I'd recommend watching 'Buy Now' to see just how far companies stoop to get people to buy stuff that they don't need. It is not to ensure that they can sell it at a subsidised rate to those who cannot afford. In this video itself, we see how selling the cake at 150/- to everyone would have suited everyone's needs- all customers could have afforded it and the baker would've earned a reasonable profit. They didn't increase the SP of some cakes to 'premium prices' in order to offer subsidised cakes to poor people at ₹50. It was done purely to maximise profits. Even the lowest price buyer, the so-called 'cheapo', was paying more than the cost price of the cake.
All great points! I just want to add that it is not always bleak.... :) There exist many implementations of differential pricing tiers that actually come at a cost to the business. For example, restaurants that offer free food to the homeless, or businesses that offer pro bono services, or colleges that offer tuition fee waivers, etc. These operate on what I referred to as the "Robinhood pricing" principle. Some conferences and workshops I have attended have a sliding scale pricing that is a fraction of their total cost which they hope to recover by charging a 'premium' to other attendees. My personal theory is that a lot of pricing principles are designed to recover investments quickly in case the business doesn't survive long-term. Except, when they do survive long-term, greed takes over... 🤷♂️ - Shrikant.
I love this "Explain like I'm 5" presentation approach you guys are going with. I'm a moron and it helps.
Pricing experiments are conducted with Porter's Five Forces in mind. And thanks for the reminder about the time value of money. 🙂That's why I only watch informative channels like yours on TH-cam, and I watch them at 1.75x playback speed.
Thanks for mentioning Porter's Five Forces - I didn't know about it and I've added it to my "to look up" list! 🙏
- Shrikant
Is it ok to say that I love you both? Man, you both are good at this, I am calling it, by the end of 2026, you will have 10 Lakh subs.........
Aapke munh mein ghee-shakkar!! ♥️
- Shrikant
Awesome video, very informative. Loved it❤❤
Very well explained 👍🏼
If anyone wants to sell large quantities of stocks in stock market, you know that all stocks are sold at different prices. You can't sell everything at same price as different number of people are ready to buy at different price (demand curve). Differential pricing is very natural when dealing with stock market. Similar economics comes in play when selling large quantity of goods or services.
Hmm, I wonder if the stock market can be thought of as (a very volatile) form of differential pricing... Because this kind of differential pricing is not from a customer segmentation perspective, IMO. You can't give out discount codes to some buyers now, can you? That's why I feel it's purely demand-supply mechanics in action.
But I am not well-versed in this subject, so I might be totally wrong! :)
- Shrikant
Boss you people are very consistent every week one really good video is coming.
Very useful. Thank u.
Same phenomenon occurs when you try to buy vegetables from street vendors when going on a car compared to that of bike or going on foot
Oh yeah, good example! Except, rigorous application of information-asymmetry is needed here to ensure the car-owner doesn't get pissed... 🤣🤣🤣
- Shrikant
They are not cheap; they are better described as strategic or mindful investors
Naveen is highly intelligent person, he knows about almost every fields.
People are desperate meeting celebs , and since childhood I was never ever desparate to meet any celebs, but truely I would like to meet people like Naveen, he is highly intelligent and blew my mind.
I mean kaise kar lete hain aap?
me too brother exactly same
This question will be (sort of) answered during the livestream we are doing this coming Friday - set a reminder if you want to know the answer! ;)
- Shrikant
😂😂😂Navin is ruthless. I would fear him.
Oh, believe me, I absolutely do! 🤣🤣🤣
- Shrikant
Add more lights to be more visible
NVDIA also does this for GPUs. A6000 vs NVDIA 4090 but with a minor difference.
Hey side question, a fellow TH-camr here (Not as good as you both in any manner tho), was wondering about the equipment you use, especially the mic you have on you, also the camera equipment, editing software, and probably a much more invasive question, how much do you spend on a video typically?
Oh, this is a tangled question because a lot of the stuff that makes this channel happen is actually intangible... We'll try and address this in the live episode we are doing this Friday! :)
- Shrikant
basically its value addition to the product
but the value is defined by you
and its not unethical if you value the speed/quality/ease of doing it/social status etc because you can always go find another option in this free world *if you are willing to*
or just accept its their work to make some profit accordingly to the costumer base and the fact that it works for them proves the world is okay with it
Really good summary! The rest of the video is a longer and more detailed exploration the intricate nuances of the categorization you've listed in your comment! Thanks so much! :)
- Shrimant
Srikant has it right when he questions the morality of this practice.
This is a straightforward ethical question if we exclude what-aboutery of normalised exploitation.
PhDs and MBAs spent on how best to fleece people...smh.
If the only moral we can spot here is how to minimise your personal cost, rather than a relook at this corrupt economic system then it is our morality and basic humanness we need to reconsider. Every child knows the answer to which is the better, desirable and more sustainable option- self- interest or universal wellbeing.
Everyone turning to self- interest turns us into cancers. Which is what we have become to this planet and one another.
If everyone was paid the same profit margin in addition to their cost price, then no one would be exploited and anyone could earn and pay for any product based on their physical ability to produce and add value to goods. If no one is exploited, no one needs charity.
Yes, there won't be any scope for infinite growth of profits in such a system but is that really the best goal we can set for humanity? Maximising Profits?
Companies are trying to maximize profits. But customer segmentation allows them to provide right value to customers.
I would say rather fixed price to all income category seems unethical. Some people don't't mind extra cost just to reduce some hassle and save time. This allows seller to sell at lower margin to people who can't afford much.
Some practices like taking benefits of customer desperation are unethical. Differential pricing in itself is not.
Another example is use of satche packets for shampoo/soap/ketchup etc. They give better value for money, but people who can spare little extra buy bottles though it's costly. Cause having bottle is convenient in so many ways.
@gsmrg the question is why some people are unable to afford basic amenities in our societies while others live in extreme luxury. The question on profit maximization is a question on income inequality in capitalistic societies that has only widened in history. Subsidies won't be needed of everyone is equally empowered. If our farmers, cobblers, artisans and domestic help began to charge the the true value of their labour they would be able to easily afford the cost price+reasonable profit of regular shampoo bottles too.
@@c.Drishta Because they do not deserve. Poor people vote for Brahmavad and then get a beef ban, which results in poor nutrition and stunted children. People can afford it, but what if that option is itself not available? Labor has to be cheap for cheap production; farmers are not innovators or agriculturists. You do not need humans or animals for the things that can be done by machines. India per capita income has increased by 3 times in the last 2000 years.
You lack a basic understanding of economics. You make products cheap by exploitation.
"You are either paying it or paying doe it through ads".... Or using a modified app that removes all ads and watch completely for free
but then you pay in security of your device and the time taken for you to find the apk or the ads you saw on the modified apk website
again nothing is free in this world
Lol, calling it 'customer segmentation' rather than 'fleecing' doesn't magically make it ethical and above board.
It is ethical. It allows seller to sell at lesser margin to people who can't afford it. Idea is to provide service to people based on what they perceive worth of the goods/services.
People earning like 40 lk per annum will believe TH-cam premium is dirt cheap..it's not worth to go through hassel of advertises. People earning 2 lk per annum definitely see free version worth it and ok to listen few ads.
Unethical are some practices like taking benefits of customer desperation, or creating false sense of urgency or scarcity. But that's not really about customer segmentation. These practices would scam everyone irrespective of real buying power.
It is called the time value of money. Without customer segmentation, poor people will not even be able to use TH-cam.
@@vinsin328 Up till 2020, youtube made all its revenue through advertisements and the content was freely accessible to all users.
We also have the examples of other free-access web resources that do not require paid subscriptions in order to remain functioning. E.g., Wikipedia, Internet Archive, Mozilla(!), TED Talks, to name a few. Even Khan Academy was completely free for the longest time. And in a world where profit is not the end-all goal for all organisations and endeavours, surely we can come up with even more creative ways to publicly sustain organisations without resorting to psychological gimmicks used to manufacture demand for 'premium' and 'exclusive' versions of the same exact goods. I'd recommend watching 'Buy Now' to see just how far companies stoop to get people to buy stuff that they don't need. It is not to ensure that they can sell it at a subsidised rate to those who cannot afford. In this video itself, we see how selling the cake at 150/- to everyone would have suited everyone's needs- all customers could have afforded it and the baker would've earned a reasonable profit. They didn't increase the SP of some cakes to 'premium prices' in order to offer subsidised cakes to poor people at ₹50. It was done purely to maximise profits. Even the lowest price buyer, the so-called 'cheapo', was paying more than the cost price of the cake.
All great points! I just want to add that it is not always bleak.... :)
There exist many implementations of differential pricing tiers that actually come at a cost to the business. For example, restaurants that offer free food to the homeless, or businesses that offer pro bono services, or colleges that offer tuition fee waivers, etc. These operate on what I referred to as the "Robinhood pricing" principle. Some conferences and workshops I have attended have a sliding scale pricing that is a fraction of their total cost which they hope to recover by charging a 'premium' to other attendees.
My personal theory is that a lot of pricing principles are designed to recover investments quickly in case the business doesn't survive long-term. Except, when they do survive long-term, greed takes over... 🤷♂️
- Shrikant.
😂😂 this is so relatable with taj mahal example
Once i was short by 150 for a batch on pw .
I searched a bit on Google and found a 600 off cupon 😂😂.
Like at 8.50 it clicked me . 😊