How to segment prices without changing the product?

Buyer identity
One of the most common ways to segment without changing the product is by requiring the buyer to identify themselves or demonstrate their high price sensitivity. A valid example is the use of coupons: when a customer takes the time to search for, save, and redeem a coupon, they are demonstrating interest in getting the best possible price. Here, the customer’s effort justifies the discount.

However, this tactic is not always well applied. For example, granting a higher discount solely based on age, without showing a clear relationship to price sensitivity, is not a recommended practice. If there is no logical connection between the condition and price sensitivity, it is not a valid segmentation tactic.

Place of purchase
Another tactic is to condition the price on the place or channel where the purchase is made. Outlets are a classic example: they offer cheaper products in remote locations with limited assortments, attracting customers willing to make the effort to save.

It is also common to incentivize online purchases, as they allow companies to save on operating costs. In this case, the savings are passed on to the price-sensitive customer.

Time of purchase
The moment the purchase, use, or payment is made can also be a condition. Airlines usually charge lower prices when the ticket is purchased in advance. This happens because tourists, who plan ahead, are more price sensitive than business travelers, who buy last-minute and are willing to pay more.

Ride-hailing apps like Uber apply this tactic with dynamic pricing, adjusting prices based on demand and ensuring that only customers less sensitive to price access the service during peak times.

Purchase quantity
Buying in large quantities is another indication of price sensitivity. That’s why many services and products offer volume discounts. Those who buy more generally seek to save more. In digital services, such as stock image libraries, credit bundles have a lower unit cost as the volume purchased increases.

In physical products, offering different sizes serves the same purpose. Buyers of larger presentations are usually heavy users and more price sensitive.

Bundling
The bundling tactic is based on the fact that price-sensitive customers are willing to leave their usual provider if they find a cheaper option by purchasing everything from a single supplier.

A valid example is triple-play telecommunications services. By combining internet, television, and phone service in a single package, the customer gets a better price than if they contracted each service separately from different companies.

However, not all combos are segmentation tactics. For example, fast-food combos are not aimed at attracting price-sensitive customers who might buy from different places, but rather at encouraging greater spending from the same customer at the same point of sale. Therefore, they do not constitute a true price-segmentation tactic.

Conditions for effective segmentation
For these tactics to work properly, they must meet three key conditions. First, they must be optional: the customer must be free to decide whether to meet the condition. Second, there must be a clear relationship between meeting the condition and the customer’s price sensitivity. And third, meeting the condition must require effort. This way, those who are not price sensitive probably will not seek the discount.

These tools allow companies to create more sophisticated pricing structures without the need for multiple versions of the product. The next step is understanding how these tactics integrate within a list price menu.