Postage Stamp Pricing - Definition & Meaning
What is Postage Stamp Pricing?
Uniform Pricing is also referred to as Postage Stamp Pricing. The question still lies is that why the name postage stamp pricing. For example: the Australian post charges 60 cents to post a standard letter. The price is fixed regardless of whether you wish to mail the letter locally or interstate. It costs Australian post more to deliver interstate but they average the price across all customers.
Similarly the concept applies to some service companies as well which charges the same amount for all customers irrespective of the type of service being utilized.
Postage stamp pricing is used for two reasons mainly:
a) The difference in prices across different service types/ products is very minor to be considered.
b) Some regions cannot afford the difference in prices.
Hence, companies tend to move towards postage stamp pricing, keeping a fixed price for all regions/ services being offered.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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