An example of captive-product pricing would be a printer and printer ink. The ink is called captive because it must be used along with the printer. It is often the case that the seller will make more money on the captive product (the ink) than on the main product (the printer). Therefore, the captive product would have to be priced above the costs of storage and delivery.
An example of product-bundle pricing would be season tickets to the theater. The price of the season ticket is lower than the price would be to purchase tickets to each production separately. This is done to promote the sale of tickets. Although the price of the season ticket is lower than if the tickets were bought separately, it is high enough so the seller still can make a profit on the sale. Therefore, the price would have to above the costs of storage and delivery.
A by-product is a product of little value that was produced during the production process. Any amount received above and beyond storage and delivery costs will be accepted because it will improve profit.
Optional-product pricing optional products, features or services that are offered along with the main product as upgrades or options. The optional product or products have costs, so they must be priced above their storage and delivery costs.
|
