Price discrimination is a pricing strategy where a company charges different prices to different customers for the same or similar product based on their willingness to pay.

Instead of offering a single uniform price, companies adjust pricing across segments using factors such as customer type, purchase volume, location, timing, or usage. The goal is to capture more value by aligning price with what each customer is willing to pay.

Price discrimination is often grouped into types:

• First-degree: pricing tailored to individual customers
• Second-degree: pricing based on quantity or usage (e.g., volume discounts)
• Third-degree: pricing based on segments (e.g., enterprise vs small business)

In B2B, price discrimination is common and often built into pricing structures through segmentation, tiered pricing, contract terms, and negotiated deals. It allows companies to serve different customers effectively without underpricing high-value segments.

However, it requires careful design. Poorly managed price differences can lead to customer dissatisfaction, internal inconsistency, or pressure during negotiations if pricing logic is unclear.