When is the use of “differentiated pricing” (price discrimination) an effective marketing tool?

Answer

The use of differential pricing is an effective marketing tool when you are marketing to a lower income part of the economy. This can be effective even in higher priced items.
1 Additional Answer
Differentiated pricing is an effective marketing tool when the market will bear and expects higher than average prices. In a high end shopping area like Rodeo Dr. lower prices would be deemed lower class merchandise.
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