also known as captive product pricing,is a pricing strategy where a “core” product is offered at a lower price. But additional products required to fully use the core product are charged separately.
A classic example is printers: they chinese overseas australia database are sold at a discount, yet require expensive ink cartridges to be purchased separately. In many cases, these cartridges cost more than the printer itself. In the software industry, a similar approach is seen with graphic design software offered at a reduced price, but users are required to download images from the company’s stock photo service.
One real-world example is Adobe.which offers older versions of software for free but removes backward compatibility. encouraging users to upgrade to a costlier version for collaborative purposes.
Other SaaS pricing strategies to look into:
– Cost-plus pricing
– Value-based pricing
– Dynamic pricing
– Skimming pricing
– Penetration Pricing
– Competitor based pricing
– Demand based pricing
What Is Captive Pricing?
Captive product pricing is a strategic approach that involves offering a base product along with product add-ons. The core product serves as the customer magnet. While the accessory products are required in order to actually use the core product.
For instance, think of a coffee The page is design to convince the visitor that Slack machine that requires specific coffee pods in order to function. Here, the machine acts as the core product, while the pods serve as accessory items. Similarly, video game consoles require you to purchase games separately. In some cases, companies may even sell the core product at a loss. Knowing that they will recoup the cost through the sale of accessories.
Implementing captive product pricing effectively requires careful consideration of what works best for your company.
The Core Product and The Captive Product
captive product pricing consists of two main components: the core product and the captive product.
The Core ProductWhen pricing products, companies lob directory must balance profitability and customer appeal.
This attractive price point plays a crucial role in attracting customers. However, companies should still account for supply, demand, and production costs to determine a profitable price for the core product.