Many supermarkets provide regular shoppers with? \"loyalty cards\" that the shop

Question

Many supermarkets provide regular shoppers with? "loyalty cards" that the shoppers swipe each time they checkout. By swiping the? card, the shopper receives reduced prices on a few goods and the supermarket compiles information on all the? shoppers' purchases.? Recently, some supermarkets have switched from giving the same price reductions to all shoppers to giving shoppers differing price reductions depending on their shopping history. A manager at one company that uses this approach? said: "It comes down to understanding elasticity at a household? level." ?Source: Stephanie? Clifford, "Shopper? Alert: Price May Drop for You? Alone," New York Times?, August? 9, 2012.

Is the use of loyalty cards that provide the same price discounts for every shopper a form of price? discrimination?

A. ?Yes, because those customers who are willing to provide the requested information will receive a lower price.

B. ?No, because the prices are not changed for the product.

C. ?No, because not everyone can get a loyalty card.

D. ?Yes, because the prices are different for each customer.

How can a retailer make more profit by understanding? "elasticity at a household? level"?

A. charge higher prices to those consumers who demonstrate an inelastic demand

B. charge lower prices to those consumers who demonstrate an inelastic demand

C. send targeted coupons by internet to those consumers who demonstrate an inelastic demand

D. send paper coupons by mail to those consumers who demonstrate an inelastic demand

What information do retailers find most helpful that they collect from their loyalty card? programs?

A. ability to measure? customers' disloyalty when they shop at a competing store

B. frequency and types of goods purchased by consumer and consumer characteristics? (e.g. age,? race, and? gender)

C. likelihood of obesity by tracking sugary snacks purchased by? consumers' body mass index? (BMI)

D. probability and degree of losses due to shoplifting by age and race

Explanation / Answer

1) Solution: Yes, because those customers who are willing to provide the requested information will receive a lower price

Explanation: Price discrimination is the practice of charging different prices from different persons for the same goods or services

2) Solution: Charge higher prices to those consumers who demonstrate an inelastic demand

Explanation: Generally high prices are charges from customer with inelastic demand

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3) Solution: frequency and types of goods purchased by consumer and consumer characteristics??(e.g. age,??race, and??gender)

Explanation: The consumer characteristics? and goods preference will be helpful information thus must collect from their loyalty card

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