If I have 2000 seats to fill and 400 prices I know I’m missing 1600 prices. Ex-CEO of American Airlines
Dynamic Pricing also called Value Pricing let’s you price the customer and not the product. So if you have multiple levers of value behind your product you sell there can be a number of different ways to allocate a price to the customer.
Now this is definitely price discrimination, though we have ultimately had the prerogative of calling discrimination a negative.
However economists have found that price discrimination is a net economic good for the world. How else would we get drugs to 3rd world countries at 1/10 the price? By offering up a lower price tier for a user that needs them in that specific country.
You have products to sell, and you want to be profitable. But don’t you want raving fans? And have price premiums that can stand up strong due to having a good brand? Dynamic pricing can control how many units you want to ship without discounting. And if you read my material, you know it’s much harder to come back from a long-term period of discounting.