The word product mix already carries a sense that the total mixture of the company product in a single product line.
Pricing is difficult for all companies because there’s varieties number of buyers who have different needs. Companies always face different degrees of competition between demand & costs. Now, we are going to see five product mix pricing strategies. However, enhance yourself by learning market leader strategies.
- Product line pricing ( various products in a product line )
- Optional pricing ( not necessary for the main product )
- Captive pricing ( must be used along with the main product )
- By-product pricing ( helps to make the main product pricing competitive )
- Product bundle pricing ( bundle of products at once )
Product line pricing: Product line pricing is a process where the price is set between various products in a product line. This is mainly occurred based on cost differences between the products, features, and competitors’ prices. Companies do this for their own benefit. For example, alpine producing companies produce different types of alpine maintaining different pricing. explore – Consumer interpretations of price.
Optional pricing: Optional pricing is a process of setting the price of optional products along with the main product. For example, a mobile phone needs a back cover, refrigerators come with an optional ice maker.
Captive pricing: Captive pricing is a process where sellers set a price for products that must be used along with the main product. For example, blades for a razor, lance for a camera. Explore – customer and competitors’ reactions to price changes.
Producers must be careful about their pricing strategies. They should maintain the right balance between the main product & captive product.
By-product pricing: By-product pricing is a process where producers set a price for by-products in order to make the main product’s price more competitive. That’s because, while producing any product or service often generates by-products. By-product comes from the making of the main product. If the by-products have no value, it’ll be hard to get rid of them. Then this will affect the pricing of the main product. By-product also brings revenues to make the main product more competitive. Enhance yourself on – price adjustment strategies.
For example: making any plastic basket may generate by-products like a bowl. Then the company also sells bowls in the market to make more money. So, gathering knowledge on – Price is a part of the marketing mix.
Product bundle pricing: Product bundle pricing is a process where sellers combine different types of products & offer the bundle at a reduced price for the customers. Customers can get too many products or services at once. For example; McDonald’s, a fast food restaurant, offers a bundle of burgers, French fries & soft drinks at a combo price. This is very helpful for promoting any product because customers may not buy this product. Learn more about – price-quality relationships.
In the conclusion, the set price is based on the nature of the product. First, it has to decide what type of product it is, and what the purpose is to use it then the producer must set its pricing strategy effectively. Check – price elasticity.