What is optional product pricing example?
Optional product pricing considers optional or accessory products along with the main product. For example, A car buyer has a choice to order a music system, GPS navigation system, or not to order such high quality and just simply buy a car. Another example is a refrigerator that comes up with an optional icemaker.
What is optional pricing strategy?
Optional product pricing is a pricing strategy whereby the core component of a product is sold for a basic price, and a menu of complementary services are offered for a separate fee. Users can opt into any of these additional tools as individual items.
What are the 2 factors of optional product pricing?
The 2 factors of optional product pricing In order for optional product pricing to be a viable method for your business, you need to have at least two products; one will function as the main product and the other as an accessory or complement to the basic product.
What are the benefits of optional product pricing?
The advantage of an optional pricing strategy is the sales and profits it drives for a company. Providing a product for a lower price will automatically entice a customer which increases the sales of the product.
What is the difference between optional product pricing and captive product pricing?
We speak of captive product pricing when companies make product that must be used along with the main product. On the contrary, in optional product pricing, we should think of products that can be bought/sold with the main product. Examples for captive product pricing are razor blade cartridges and printer cartridges.
What is two part pricing example?
Two-Part Pricing (also called Two Part Tariff) = a form of pricing in which consumers are charged both an entry fee (fixed price) and a usage fee (per-unit price). Examples of two-part pricing include a phone contract that charges a fixed monthly charge and a per-minute charge for use of the phone.
What is optional product modification?
Optional Modification means a modification or improvement of a Railcar, the cost of which is capitalized in accordance with U.S. GAAP, that (a) is not a Required Modification and (b) complies with the criteria set forth in Section 5.04(z)(ii). Sample 2.
How can companies benefit from captive product pricing and by product pricing?
Benefits of Captive Product Pricing Strategy Lower pricing of the core product invites the customer, whereas higher pricing of the captive (accessories) products balances the profit margins. As the customer base increases because of the low pricing of core products, the sales of captive products also rise.
What is captive product pricing in marketing?
Captive product pricing is the pricing of products that have both a “core product” and a number of “accessory products.”