Using outlet stores to price discriminate has been successful for many companies, with sales increasing faster than at conventional retail stores.

Question

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Outlet stores offer discounted prices on products that didn't sell well or are from previous seasons, which allows companies to target price-sensitive customers who are willing to sacrifice some quality for a lower price. By pricing certain products lower at outlet stores, companies can still maintain higher prices at their regular retail stores in order to appeal to customers who are willing to pay more for the latest styles or better quality. This practice has been successful for many companies, with sales increasing faster in outlet stores than at conventional retail stores.

Using Outlet Stores to Price Discriminate Has Been Successful for Many