Lol, just a FYI about McCormick they also produce the generic spices on the exact same lines with the exact same spices as their own brand.
I worked on the ground pepper line, the ONLY difference between McCormick and the black white 4oz cans was the amount that was considered “acceptable”. Brand name was kicked off it was under filled below 3.75 while generic cans could be 3.5 oz and still considered acceptable.
Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different market segments.[1][2][3] Price discrimination is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy.[3] Price differentiation essentially relies on the variation in the customers’ willingness to pay[2][3][4] and in the elasticity of their demand. For price discrimination to succeed, a firm must have market power, such as a dominant market share, product uniqueness, sole pricing power, etc.[5] All prices under price discrimination are higher than the equilibrium price in a perfectly competitive market. However, some prices under price discrimination may be lower than the price charged by a single-price monopolist. Price discrimination is utilised by the monopolist to recapture some deadweight loss.[6] This Pricing strategy enables firms to capture additional consumer surplus and maximize their profits while benefiting some consumers at lower prices. Price discrimination can take many forms and is prevalent in many industries, from education and telecommunications to healthcare.[7]
In a theoretical market with perfect information, perfect substitutes, and no transaction costs or prohibition on secondary exchange (or re-selling) to prevent arbitrage, price discrimination can only be a feature of monopoly and oligopoly markets,[19] where market power can be exercised (see ‘Price discrimination and monopoly power’ below for more in-depth explanation). Without market power when the price is differentiated higher than the market equilibrium consumers will move to buy from other producers selling at the market equilibrium.[20] Moreover, when the seller tries to sell the same good at differentiating prices, the buyer at the lower price can arbitrage by selling to the consumer buying at the higher price with a small discount from the higher price.[21]
You’re undermining their reliance on consumers not having perfect information there.
Lol, just a FYI about McCormick they also produce the generic spices on the exact same lines with the exact same spices as their own brand.
I worked on the ground pepper line, the ONLY difference between McCormick and the black white 4oz cans was the amount that was considered “acceptable”. Brand name was kicked off it was under filled below 3.75 while generic cans could be 3.5 oz and still considered acceptable.
https://en.wikipedia.org/wiki/Price_discrimination
You’re undermining their reliance on consumers not having perfect information there.