Explain the concept of personalized pricing.

Explain the concept of personalized pricing.

Personalized pricing refers to the practice of setting different prices for different customers based on their individual characteristics, preferences, or purchasing behavior. It involves tailoring prices to maximize profits by charging higher prices to customers who are willing to pay more and lower prices to customers who are more price-sensitive. This strategy is often enabled by the collection and analysis of customer data, allowing businesses to segment their customer base and offer customized pricing strategies. Personalized pricing can be seen in various industries, such as airlines, hotels, e-commerce platforms, and insurance companies.