Marketers must modify their price-setting logic when the product is part of a product mix. In
product mix pricing, the firm searches for a set of prices that maximizes profits on the total mix.
Pricing is difficult because the various products have demand and cost interrelationships and are
subject to different degrees of competition. We can distinguish six situations calling for productmix
pricing: product line pricing, optional-feature pricing, captive-product pricing, two-part pricing,
by-product pricing, and product-bundling pricing.
PRODUCT LINE PRICING Companies normally develop product lines rather than single
products and introduce price steps. A men’s clothing store might carry men’s suits at three price
levels: $300, $600, and $900, which customers associate with low-, average-, and high-quality. The
seller’s task is to establish perceived quality differences that justify the price differences.41
OPTIONAL-FEATURE PRICING Many companies offer optional products, features, and
services with their main product. A buyer of the 2010 Subaru Outback 2.5i can order four-way
power passenger seats, an All-Weather package, and a power moon roof as optional features.
Pricing options is a sticky problem, because companies must decide which to include in the
standard price and which to offer separately.Many restaurants price their beverages high and their
food low. The food revenue covers costs, and the beverages—especially liquor—produce the profit.
Marketers must modify their price-setting logic when the product is part of a product mix. In
product mix pricing, the firm searches for a set of prices that maximizes profits on the total mix.
Pricing is difficult because the various products have demand and cost interrelationships and are
subject to different degrees of competition. We can distinguish six situations calling for productmix
pricing: product line pricing, optional-feature pricing, captive-product pricing, two-part pricing,
by-product pricing, and product-bundling pricing.
PRODUCT LINE PRICING Companies normally develop product lines rather than single
products and introduce price steps. A men’s clothing store might carry men’s suits at three price
levels: $300, $600, and $900, which customers associate with low-, average-, and high-quality. The
seller’s task is to establish perceived quality differences that justify the price differences.41
OPTIONAL-FEATURE PRICING Many companies offer optional products, features, and
services with their main product. A buyer of the 2010 Subaru Outback 2.5i can order four-way
power passenger seats, an All-Weather package, and a power moon roof as optional features.
Pricing options is a sticky problem, because companies must decide which to include in the
standard price and which to offer separately.Many restaurants price their beverages high and their
food low. The food revenue covers costs, and the beverages—especially liquor—produce the profit.
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