Consider when you go to the drive-through at your favorite fast-food establishment. Bundle Pricingīundle pricing is another popular pricing strategy that marketers use to promote purchasing multiple products at once. Captive product pricing maximizes profits by intentionally pricing both the core and captive products at a level that will increase the perceived value to consumers. Marketers may price the printer at a very reasonable price, knowing it will catch your attention and thus make the price of the ink seem less expensive. When you are shopping for the printer, you are likely to take into consideration the price you will have to pay for ink as well. In the above example, the core product is the printer and the captive product is the ink. Captive product pricing uses a strategy that requires both a core product and a captive product. Once you buy the printer, you’re also going to need to purchase what? That’s right, ink. (credit: “d2590-1” by Stephen Ausmus/USDA/flickr, CC BY 2.0) Captive Product PricingĪssume you need to purchase a new printer for your home computer. (Recall that a product line is a group of related products differentiated by features and price.) Unilever sets a higher price for some of its product lines and lower price points for others in order to capture various target markets, known as product line pricing (see Figure 12.7).įigure 12.7 Companies utilize pricing strategies like product line pricing to appeal to various target markets through multiple products. Within its host of products, Unilever has divided its products into price categories higher priced items have a higher perception of value and so on. For example, Unilever is the manufacturer of many brands that you’ve likely heard of: Dove, Axe, and Hellman’s to name a few. One strategy for pricing products is to price products in a product line the same or similar. Many large companies offer multiple products and product lines in their product mix. Some common strategies and tactics for existing products are discussed next. As products go through the product life cycle, price changes will likely need to occur to maintain value for customers and continue to maximize profits. More often than not, marketers must make pricing decisions on existing products rather than new products.
2 Provide examples of each pricing strategy and tactic.1 List the pricing strategies and tactics for existing products.By the end of this section, you will be able to:
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