The primary goal of this study was to determine the impact of price discrimination
on tourism demand. Four objectives were defined with reference to the primary
research goal.
The first objective was to analyse the concept of price discrimination and relevant
theories by means of a literature study. In this regard it was found that price
discrimination between markets is fairly common and that it occurs if the same
goods were sold to different customers at different prices. Price discrimination is
also possible as soon as some monopoly power exists and it is feasible when it is
impossible or at least impractical for the buyers to trade among themselves.
Three different kinds of price discrimination can be applied, namely first-degree,
second-degree and third-degree price discrimination. The data also indicated
that price discrimination is advantageous (it mainly increases profit) and that it
has several other effects too.
The second objective was to analyse examples of price discrimination by means
of international case studies. In these different case studies it was found that
demand and supply, therefore consumer and product, formed the basis of price
discrimination. If demand did not exist, it would be impossible to apply price
discrimination. The findings also indicated that, for an organisation to be able to
practice price discrimination, the markets must be separated effectively and it will
only be successful if there is a significant difference in demand elasticity between
the different consumers. Furthermore, the ability to charge these different prices
will depend on the consumer's ability and willingness to pay. If an organisation
should decide to price discriminate, it would lead to a higher profit, a more
optimal pricing policy and also to an increase in sales.
The third objective was to analyse national case studies. This was done through
comparing the data of a tourism organisation price discriminating (Mosetlha Bush
Camp, situated in the North West) to two organisations that did not implement
price discrimination (Kgalagadi Transfrontier Park in the Northern Cape and
Golden Leopard Resort, also situated in the North West). It was found that a
customer with low price elasticity is less deterred by a higher price than a
customer with a high price elasticity of demand. As long as the customer's price
elasticity is less than one, it will be very advantageous to increase the price: the
seller will in this case get more money for less goods. With the increase in price
the price elasticity tends to rise above one.
The fourth objective was to draw conclusions and make recommendations. It
was concluded that price discrimination could be applied successfully in virtually
any organisation or industry. Furthermore, price discrimination does not always
have a negative effect; but can have a positive ass well. It can have a positive
effect on tourism demand. The findings emphasised that the main reason for
implementing price discrimination is to increase profit at the cost of reducing
consumer surplus. From the results it was recommended that more research on
this topic should be conducted. / Thesis (M.Com. (Tourism))--North-West University, Potchefstroom Campus, 2006.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nwu/oai:dspace.nwu.ac.za:10394/1162 |
| Date | January 2005 |
| Creators | Fouché, Elizabeth Maria |
| Publisher | North-West University |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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