Region coding of ink cartridges does not improve performance

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Computer printer manufacturers usually sell printers at a low margin over cost and generate much more income from subsequent sales of the high-margin ink cartridges required for each printer. One global printer manufacturer now designs its printers so they only work with ink cartridges made in the same region. Ink cartridges purchased in the United States will not work for the same printer model sold in Europe, for example.

This “region coding” of ink cartridges does not improve performance. Rather, this action prevents consumers and gray marketers from buying the product at a lower price in another region. The company says this action allows it to maintain stable prices within a region rather than continually changing prices due to currency fluctuations. Please discuss the extent to which the company’s action in this case was ethical.

Reference no: EM132291096

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