Examples of Products With Differential Pricing

by Neil Kokemuller, Demand Media Google
Intangible products often make more sense with differential pricing because of varying customer costs.


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Differential pricing is a pricing strategy whereby a company establishes different price points for different customers based on a number of variables, including customer type, volume, and delivery and payments terms. It is also referred to as discriminatory pricing because companies essentially discriminate with their strategy by charging higher prices to those customers willing to pay them.

Movie Theater

Differential pricing is often a good fit with more intangible, service-oriented solutions where customers place different values on the merits of the service. Cinemas can differentiate pricing by charging full price to moviegoers who are willing to pay that amount. They can still offer incentives to more price-sensitive customers through the use of coupons, advanced ticket promotions and other types of discounts for certain types of customers.


The airline industry is one of the most notorious for differential pricing strategies. Airlines commonly schedule flights with a premium ticket price. As time goes by, they gradually reduce the price point to attract more discerning customers to fill the plane. The nature of differential pricing is such that it benefits companies that can only benefit by adding volume. Airlines make no money off of empty seats and it costs them very little extra to sell one more ticket, even at a reduced price.


Entertainment is certainly a broad category of products and services, but entertainment offerings are routinely presented with differential pricing for common reasons. Restaurants and amusement parks, for instance, often offer discounts for both senior citizens and children under a certain age. Buffet-style restaurants attract families and older customers with these discounts and feel comfortable in a lower price point because seniors and children are likely to consume less food than those in the age ranges in between.

Medical Care

In his May 2003 Insider Online article "Why Differential Pricing Helps the Poor," Merrill Matthews explains that many doctors and other medical providers have regular service fees for standard patients but often charge lower fees for poorer patients. Not only is this attractive to lower-income people, but it is often perceived by the public as a socially responsible behavior, thus enhancing the ethical reputation of the provider.

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