Even if the store would lose money by selling the advertised item at a lower price, they’ll still make a profit by selling a cart full of other products to the consumer while a customer is still shopping.There’s another pricing strategy used by companies with larger product lines which is known as Prestige pricing.
Our technology solves one major challenge for every small business and that is acquiring local customers. Let us take and understand this with the help of an example. In this post you’ll find everything about Product line pricing strategy and how to price the products strategically if you have a broad product range.For example, a mobile phone company offering different smartphones with different features at different prices.However it is a common practice by many companies that have multiple product lines to use a product line pricing strategy that creates an impression of value toward certain products in the same category.
Gillette offers razors at a discounted price and sometimes even for free or as a loss leader, while the replacement cartridges are priced much higher. Edmunds has a bachelor's degree in journalism. Examples of these types of products include luxury watches, luxury cars, high-end fashion accessories, perfumes and other goods that are attractive to those that fall in the higher income groups.We hope the above post on Product line pricing strategy will help your company or business to price your products accurately for the consumers without giving away much of your margins and optimize the product prices that will attract new consumers as well in the months and years to come.ADVANTON empowers small businesses with the world’s leading CLOUD solution for local business marketing. A pet sitter, for example, might raise her standard fee for daytime pet sitting and consequently lose customers who might have hired her for overnight stays, grooming or training services.Sam Ashe-Edmunds has been writing and lecturing for decades.
For example, if you set your base product price too high, you might lose enough sales of that product to lose your total gross profits, because your add-ons and related products are where you make your best margins. Under Bundled pricing, one product may have a standard price, but if a consumer chooses to buy multiple products, then the price may be lowered to half or less for each one but it should be bought as a bundle and not individually.Companies that have large product lines often use a pricing concept known as Leader Pricing under which companies offer a product known as loss leader. A landscaper might offer a fall aerating and reseeding package at a price well below the competition to land a summer lawn-cutting contract.Part of the rationale of product-line pricing is that changing the price of one product can affect the rest of the products in the line. Such a pricing technique is often used by companies to create cost categories that separate goods into different levels of perceived value.
Specific Problems of Product-line Pricing: Pricing Products which Differ in Size: Two approaches to this problem are possible: (1) Charging a uniform price irrespective of size differences: This practice is common where buyers’ benefits do not vary with size and the costs also do not differ materially on account of the difference in size. It is offered much lower than the actual price and company often sells it at a loss but cover the losses by selling additional products to the consumers at much higher prices. Each product would then be priced accordingly. If you set your add-on prices too high, you might lose sales of your base product. About 0% of these are Digital Signage and Displays, 0% are Fiber Optic Equipment. The best example of this strategy in use in the modern times is how car companies price various models.
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