Captive products are items designed specifically for use with another product. Many captive products are necessary to the function of the core product. For example, a company that makes printers also offers ink cartridges for that specific model printer.
Similarly, you may ask, what is meant by bait pricing?
Illegal practice of ‘baiting’ customers with unrealistically low prices to bring them into the store, and then trying to sell them higher-priced goods on the pretext that the advertised bargain-priced goods are sold out. Also called bait pricing.
What is bundle pricing and why would it be used?
In a bundle pricing, companies sell a package or set of goods or services for a lower price than they would charge if the customer bought all of them separately. Common examples include option packages on new cars, value meals at restaurants and cable TV channel plans.
What are captive parts?
Captive supply is a term for that part of the supply that is not owned by a company but is used by the company to maximize its own profits often at the unknowing expense of those who actually own those supplies.
What is a captive brand?
What is a Private Brand? What is a Captive Brand? Private – private label or store brand; brand name owned by wholesaler or retailer. Captive – brand manufactured by a third party exclusively for a retailer (ex: only at Walgreen’s brand)
What is an example of a by product?
When the process of making one thing results in a second product as well, that second thing is called a byproduct. Molasses, for example, is a byproduct of refining sugar. Sawdust is a byproduct of the lumber industry, and feathers are a byproduct of poultry processing.
What is a two part tariff?
A two-part tariff (TPT) is a pricing technique in which the price of a product or service is composed of two parts – a lump-sum fee as well as a per-unit charge. In general, such a pricing technique only occurs in partially or fully monopolistic markets. This can make the identification of two-part tariffs difficult.
What is a bundled price?
Price Bundling. Combining several products or services into a single comprehensive package for an all-inclusive reduced price. Despite the fact that the items are sold for discounted prices, it can increase profits because it promotes the purchase of more than one item.
What is a by product pricing?
By Product Pricing is a pricing strategy in which the by products of a process are also sold separately at a specific price so as to earn additional revenue from the same infrastructure and setup. By product is something which is produced as a result of producing something else ( the main product).
What is optional pricing strategy?
Optional Product Pricing. Companies will attempt to increase the amount customers spend once they start to buy. Optional ‘extras’ increase the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other.
What is the product price?
In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the market place, competition, market condition, brand, and quality of product. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix.
What is the reference price?
A reference price (RP) is the price that a purchaser announces that it is willing to pay for a good or service. It is used by high-volume purchasers to inform suppliers. Reference pricing requires sufficient competition. Otherwise, consumers have no choice about providers, who in turn face less pricing pressure.
What is line pricing?
The process used by retailers of separating goods into cost categories in order to create various quality levels in the minds of consumers. Effective product line pricing by a business will usually involve putting sufficient price gaps between categories to inform prospective buyers of quality differentials.
What is the definition of price lining?
Price lining, also referred to as product line pricing, is a marketing process wherein products or services within a specific group are set at different price points. The higher the price, the higher the perceived quality to the consumer.
What is a product mix pricing strategy?
Pricing is a critical element of the marketing mix and companies must make strategic choices about how to price their products to best achieve their business goals. The product mix is the collection of products and services that a company chooses to offer its market.
What is optional feature pricing?
A method of determining product costs whereby a business sets a low cost for its most basic product and then profits from selling more costly accessories.
What is market segmentation pricing?
Price segmentation is simply charging different prices to different people for the same or similar product or service. You see examples every time you go shopping: student prices at movie theaters, senior prices for coffee at McDonald’s, people who use coupons and many more.
What is the definition of odd even pricing?
Psychological pricing method based on the belief that certain prices or price ranges are more appealing to buyers. This method involves setting a price in odd numbers (just under round even numbers) such as $49.95 instead of $50.00.
What is a standard markup percentage?
Markup can be expressed as a percentage of cost or of selling price. Consider an item that costs the seller $50 and retails for $100. Retailers typically express markup as a percentage of selling price. According to Entrepreneur, the retail term for a 50-percent markup is “keystone,” sometimes abbreviated as “key.
What is odd number pricing?
Odd pricing refers to a price ending in 1,3,5,7,9 just under a round number, such as $0.19, $2.47, or $64.93. Even pricing refers to a price ending in a whole number or in tenths, such as $0.20, $2.50, $65.00.
What is a price decoy?
The decoy effect, also called the asymmetrical dominance effect, is a phenomenon where people tend to have a change in preference between two options when presented with a third option that is asymmetrically dominated. This natural behaviour, resulting from the decoy effect, is often exploited in pricing tables.
What is backward pricing?
Demand-backward pricing. a method of pricing in which prices are set by determining what consumers are willing to pay; then, costs are deducted to see if the profit margin is adequate.
What is event pricing?
Price is an integral stage of event planning process. Proper pricing allows you to accrue more revenue and to increase sales of event tickets. If your prices are too high, they may scare away your audience. On the other hand, pricing tickets too cheaply can decrease the rate of your event or attract an unwelcome crowd.
What is professional pricing?
The Professional Pricing Society provides valuable pricing strategies, publications, research and additional resources to the growing community of pricing professionals. Founded in 1984, we serve thousands of members worldwide, representing leading industries and business expertise in over 50 countries.