not if no one else does!

As marketer, we learn about price discrimination and see it in practice.  Unlike price gouging or price fixing, price discrimination is legal.

No other instance of price discrimination is as prevalent as my recent experience during my trip to India.

Sightseeing was a big part of the agenda, particularly given India rich history and culture AND I had the benefit of a local tour guide, my business partner and friend.  Though what amazed me was how local attractions blatantly charge foreigners almost 40x the premium over locals/Indian natives.  So take the entry fee to Taj Mahal for example, locals would pay a 20 Rupees for an entry ticket, but foreigners were required to pay 750 Rupees – astronomical in relative terms though arguably somewhat digestible in absolute terms ($0.50 cents versus $15.00).

So the same concept applied from place to place.  At one point, I tried to pass as someone from Northeast India call Nagaland – where Indians look more like Chinese.  That didn’t fool anyone.  So lesson #1, try sari next time – or a baroque – yaks!  Though in their defense, discriminatory price helps the administrators make the attractions more accessible to millions of ordinary Indians while still charging foreigners what they would reasonably expect to pay for an attraction in their home country.

Lesson #2 relates to price negotiation.  When a foreigner asks for the price, it automatically goes up by 100%.  Worse if you are summoned by an Auto or Tuk Tuk driver wherein the driver gets a commission by bringing you to the store.  Sure enough, the price difference was astonishing.  Within a ¼ mile radius, the price varied from 12,000 Rupees ($260) on the high-end to 1,800 ($39) on the low-end, for the same item – seriously!  Lesson learned:  it pays to shop around!

Finally lesson #3, grab a local friend if you can – I totally lucked out here.  Not only did I end up paying less than 50% of the original price, the price got even better once we factored in volume discount, and in this case, for business tchotchkes.  My job was to tell my friend which items I wanted and then let her work her magic.  Businesses resented the loss in margin – but we scored big!

So. . . since I just started to understand how things work in India – I think I should visit again soon to rehash some of the skills.  After all, practice makes perfect . . . that’s my story and I’m sticking to it!

Jenny Feng

MarketeersClub.com

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