Ma, Don’t you think we should increase our prices for our international students to earn more since the dollar keeps increasing? This was my manager’s suggestion in our Monday management meeting.
I raised an eyebrow and then paused to think through it. She noticed that I wasn’t excited and she continued..”Ma, Last week Dollar was sold for N650 and today N700. Imagine how much, we are going to make if we increased our prices.
She went further to explain that the price increase should only be for international clients. Instead of pricing our products in Naira, we should put a fixed rate for international students. This will help us earn more when converted to our local currency. lLast week at N650 per dollar we sold a N30,000 Product for $46. Today, at N700 per dollar, it will be sold for $42. So instead of pricing in Naira, we should have a fixed dollar price in order to earn more She believes international students will not notice the increase since it is priced in their currency.
Reflecting on my learning from Business Ethics Class, though this was going to bring more money to the company it was unethical. If we must increase prices, It should be for both local and international clients. We should not discriminate or leverage on the ignorance of our international clients.
I immediately had to educate her on Unfair pricing . Unfair Pricing is a situation where a party capitalises on the condition /urgent need of another person and the demand for a higher price than the market price. Leveraging on the buyer’s Ignorance of the market price to charge a higher price is also considered unfair.
For instance :-I recently ordered a Bolt Taxi to take me to the Airport to catch a flight and a clear fee was written on the App. On the Driver’s arrival, he demanded a higher price and threatened to decline the trip, if I wasn’t willing to pay the increased price. I had a few minutes left and a decline will cost me more because I was going to miss my flight. He took advantage of my vulnerability.
Unfair prices arise when
1:The seller takes advantage of monopoly to increase the market price
2:.A buyer accepts to pay a price above market price due to ignorance or special needs
3: Due to special needs and the absence of market price the buyer is deceived to agree by substantial information difference.
I am really grateful for this knowledge. Int is helping me build an Ethical and Sustainable business.