0
Suppose, 'ABC Company' introduced some products in the markets. For the time being let us call it as P1, P2, P3, P4, P5. Consumers availed these products and kept using it. After a particular period of time, the company analyzed the performance of their products in the market. (The well performing products brings in more revenue to the company, the down performing products brings less revenue/profit to the company).
Let us say, P3 & P4 are contributing much lesser revenue compared to the overall revenue contributed by P1, P2 & P5. Maintaining P3 and P4 becomes thus an overhead for ABC Company. One solution is to completely eliminate P3 & P4 from their products list. But this solution is not a feasible one, because there may be customers who are still using the service. If they eliminate the products, at the same time the company is loosing the customer base also.
Second option is to reduce the price of P3 & P4. It will work sometimes, but at the same time it is another less feasible solution and unattractive.
Another option left with the company is to bundle P3 & P4 and sell it to customers. Or they can bundle P3 & P2, P4 & P4 etc etc. It depends on the type of product, type of the company on how to bundle their products. Additionally new and new customers will become happy that they are getting new products along with their actual subscription in lesser price. Also the prevailing customers will be retained for a longer time as well.
What else can I help you with?
Single product pricing and mult product pricing?
Single product pricing refers to a single purchase, such as one bottle of Pepsi. Multiple product pricing refers to purchasing more than one product at a time, such as a pallet of Pepsi.
What is the difference between cost plus pricing and marginal pricing?
Cost plus pricing is based on full product cost plus desired profit margin to arrive at the product price, while marginal cost plus pricing makes use of the product's total variable cost plus desired profit margin to arrive at the product's price. Marginal cost plus pricing (or "mark-up pricing) is based on demand, and completely ignores fixed costs in arriving at the product's price.
What is pricing methods?
Pricing methods are a way to determine how a product will be priced. It basically is a planning process.
What is captive-product pricing?
Pricing products that must be used with the main product. Like ink cartridges for the printer.
Which pricing method sets the price of the product on what the customer is willing to pay?
The pricing method that sets the price of a product based on what the customer is willing to pay is known as value-based pricing. This approach focuses on the perceived value of the product to the customer rather than the cost of production or market competition. By understanding customer preferences and willingness to pay, businesses can optimize their pricing strategy to maximize revenue and customer satisfaction.
What is a Product Bundle Pricing example?
A product bundle pricing example is when a grocery store has a sale that includes a discount if the customer buys all of a list of selected items selected by the store.
What is product bundling pricing?
Product bundle pricing is sellers combine several products at the same price. E.g software, books, CDs.
What is product mix pricing?
It's the pricing of the product
Single product pricing and mult product pricing?
Single product pricing refers to a single purchase, such as one bottle of Pepsi. Multiple product pricing refers to purchasing more than one product at a time, such as a pallet of Pepsi.
Explain how product form pricing may be a pricing option at Quills?
Explain how product form pricing may be pricing option at Quills?
How do you price product?
pricing a product depends upon the following factors which are1-product quality2-product features3-Product performance4-cost of production5-customer based pricing
Product is a bundle of utilities?
philip lotler
Explain the product mix pricing strategies with example?
Product Mix Pricing StrategiesA lot of companies have products with variants rather than than offering just a single version of the product. This is done to target different groups of consumers so that the company can get something out of every segment. For this Product Line Pricing is used in which their are different price marks which then vary on quality, features, and requirements. For examaple Dell the PC manufacturer makes a lot of different versions of its Pcs which then range from $269 to $25000.Optional-Product pricing is often used with Product-line Pricing in order to sell more to the customers, this is mostly done by electronic companies who prompt you to buy accessories as well with your original product for a better experience. Dell again is another good example of this as when ever you buy a Dell you get options to buy other accessories such as mice, speakers, keyboards, storage devices, flash drives, printers, etc. Car manufacturers are practice this to increase revenues as they offer add-ons such as alloy wheels, cd changers, leather interior, spoilers, and other trim options.Then there is Captive Product Pricing, which involves selling and making products that must be used along with the main product. Examples being; printer cartridges, video game cartridges, Razor blades, staples, computer software, or camera film(or memory cards these days).Another clever strategy is By-Product Pricing in which the company sells its By-products at a very cheap rate in order to attract customers to buy the firms main products.Most Customers are very much attracted when they see Bundle offers, a company may earn more revenue by selling different products in a bundle and giving discount on it, this way they will be able to sell more and give the customers more value. A very common examples is of restaurants which make food deals like Mc Donlads, KFC, Pizza Hut, all they do is bundle in a couple of their products discount them a little and that's its. The customer would be more willing to buy a set bundle rather than buying the same things separately. This is called Product Bundle Pricing.
What is the difference between cost plus pricing and marginal pricing?
Cost plus pricing is based on full product cost plus desired profit margin to arrive at the product price, while marginal cost plus pricing makes use of the product's total variable cost plus desired profit margin to arrive at the product's price. Marginal cost plus pricing (or "mark-up pricing) is based on demand, and completely ignores fixed costs in arriving at the product's price.
What is pioneer pricing?
Pioneer pricing is setting an initial price for a new product. This is quite essential as it will be the basis of judging how the product does in the market.
Examples of by-product pricing?
a pricing method used in situations where a saleable by-product results in the manufacturing process. If the by-product has little value, and is costly to dispose of, it will probably not affect the pricing of the main product; if, on the other hand, the by-product has significant value, the manufacturer may derive a competitive advantage by charging a lower price for its main product.
How to conduct effective market research for a new product launch?
To conduct effective market research for a new product launch, start by defining your target audience, analyzing competitors, conducting surveys and focus groups, and gathering feedback from potential customers. Use this information to make informed decisions about your product's features, pricing, and marketing strategy.
