Product Mix pricing strategy:

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Offline Shah Alam Kabir Pramanik

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Product Mix pricing strategy:
« on: November 19, 2015, 06:29:12 PM »
 Product Mix pricing strategy: The strategy for setting a product’s price is often changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes the profits on the total product mix. Product mix pricing strategies include five situations;
1.   Product line pricing: Product line pricing is setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features and competitors prices. Companies usually develop product lines rather than single products. For example, Snapper makes many different lawn mowers, ranging from simple walk-behind versions starting at $34900, to elaborate “Yard Cruisers” and lawn tractors priced at $2200 or more. Shampoo of uniliver ltd bd.
2.   Optional-Product Pricing: Many company use optional-product pricing—offering to sell optional or accessory products along with their main product. For example, a car buyer may choose to order alloy wheels and a CD changer. Refrigerators come with optional ice makers. And an iPod buyer can also choose from a bewildering array of accessories, everything from travel chargers and FM transmitters to external speakers and armband carrying cases.
3.   Captive product pricing: Captive product pricing is setting a price for products that must be used along with a main product. Examples of captive products are razor blade cartridges, video games, and printer cartridges. Producers of the main products (razors, video game consoles, and printers) often price them low and set high markups on the supplies. Thus, Gillette sells low-priced razors but makes money on the replacement cartridges.
4.   By product pricing: By-product pricing is setting a price for by-products in order to make the man product’s price more competitive. Using by-product pricing, the manufacturer will seek a market for these by-products and should accept any price that covers more than the cost of storing and delivering them. By-products can even turn out to be profitable. For example, papermaker MeadWestvaco has turned what was once considered chemical waste into profit-making products.
5.   Product bundle pricing: Using product bundle pricing, sellers often combine several of their products and offer the bundle at a reduce price. For example, fast-food restaurants bundle a burger, fries, and a soft drink at a combo price.