Because only a few people can afford them, expensive products create the illusion of exclusivity, status and quality. A tried-and-true product line pricing strategy, price bundling involves packaging several related items together as one item.You can see this in package deals associated with holidays or in automobile sales where the car comes in a bundle with a whole variety of accessories. You might also hear product line pricing referred to as price lining, but they refer to the same practice.The goal of product line pricing is to maximize profits by positioning new products with the highest number of features or with the most cutting-edge individual features at the highest price point. Let’s delve a little deeper into examples of product line pricing strategies done well. That's product line pricing in action.Hotels offer budget rooms as a base product, with all the stock features included. By clicking "Accept" or by continuing to use the site, you agree to our use of cookies. Customers appreciate bundles for their price point and the simplicity of one purchase instead of two. Instead, the price-differentiated products work together to increase market share. If you've ever stayed in a hotel, you'll remember the feeling of muffled jealousy when you hear the person next to you at reception checking into the penthouse suite. Unless you have a particularly narrow-use product, tailored intimately to a certain buyer persona, the more needs your product can satisfy, the more popular it’ll be. Wherever quality is a variable, product line pricing can be effective. That product can sometimes be a loss leader—a basic product sold for a very low price or free in order to bring in new business. Larger companies can circumvent this by using alternative brands (i.e., one make for low-price conditions, one make for high-price conditions) to cultivate a more versatile market offering.An even more basic practical drawback of product line pricing is that it requires a product line. This understanding will inform its approach to price bundling. We’ll help you find out. Three Tier Pricing is one of the most common pricing systems, as it gives people options.. Pro’s: Gives options for multiple budget ranges.Some users will very lightly use a product warranting the cheapest option, and much heavier users of the product can pay more. But entrepreneurs who sell a commodity-like service or product, for example warehousing or plain white t-shirts, are more likely to compete on low costs and low prices. They have an intimate understanding of the value of each of its product features, represented by a dot on the matrix. The 6 most common examples of optional product pricing. This is where you show the customer THREE pricing options. Though all products bundled together are complementary, this takes is a step further. A list of price discrimination strategies. A definition of channel pricing with examples. A good product line pricing strategy will allow you to market to different customer types, as well as anchor your products.Whether you realize it or not, you have likely seen an example of product line pricing. We've given a few examples and went into some detail about how optional product pricing works, but now let's take a closer look at the strategies involved in several common examples of the pricing method. Captive product pricing is an extremely powerful strategy in the set of product mix pricing strategies. The high-value, high willingness-to-pay (WTP) features will be front and center in a bundle. The sum of all your product lines is known as your product mix. Here’s a question that stumps too many young SaaS companies: what’s your pricing strategy? Leader pricing involves the assiduous use of discounting: putting items on discount helps pick up store traffic. It refers to a pricing method in which the fixed amount or percentage of the cost of the product is added to the product’s price to get the selling price of the product. That makes product line pricing, being able to cater to different customer segments, key to their success.It goes for deals on the same car, too. When you go for a car wash you have an option of choosing a car wash for Rs 200 or a car wash and a car wax for Rs 400 or the entire package including a service at Rs 600. They all have price points that are sufficiently differentiated to make the quality differentials obvious - but there’s still something for all types of customers here. Join the 18,000 companies following the next release. Bait pricing involves offering a huge sale on an item that’s in limited supply.As with discount pricing, bait pricing is intended to drive customers to your site or store where you can offer them a similar, higher-priced item once the item on sale is sold out.However, bait pricing is not the same as bait-and-switch, in which the seller has no intention whatsoever of actually selling the customer the “bait.” This sales tactic is illegal, you know.

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