Pricing is an important part of a company’s marketing mix strategies. Pricing strategy helps to increase a company’s product or service sales in selected market. It also have direct impact on growing company’s market share. So we can say that pricing is one of the most important factors of a company’s marketing mix strategy. Before proceeding towards the main topic “product mix pricing strategies in marketing” first you should be aware of this common marketing terms “product mix or product portfolio”. Here I am mentioning three most common definitions of product mix.
- The product mix is the collection of all those products and services that a particular company offers in the market.
- The set of all product line or item which a particular seller offers to sale.
- The number of all product of similar nature or kind offered by a particular seller for sale.
5 Types of Product Mix Pricing Strategies
When the product is a part of product mix or portfolio, companies adopt five kinds of pricing strategies in marketing which are as under
Product Line Pricing
This strategy is used for setting the price for entire product line. Many companies now a day develop product line instead of a single product. So product line pricing is setting the price on the base of cost difference between different products in a product line. Marketer also keeps in mind the customer evolution of different features and also competitive prices.
Optional Product Pricing
This strategy is used to set the price of optional products or accessories along with a main product. For example refrigerator comes with optional ice maker or CD players and sound systems are optional product with a car. Organizations separate these products from main product because organizations want that customer should not perceive products are costly. Once the potential customer comes to the show room, organization employees explain the benefits of buying these optional or accessory products.
Captive Product Pricing
This is strategy used for setting a price for a product that must be used along with a main product, for examples blades with razor and films with a camera. Gillette sells low priced razors but company make money on the replacement of cartridges.
By-product pricing is determining of the price for by-products in order to make the main product’s price more attractive and competitive. For example processing of rice results in two by-products i.e. rice husk and rice brain oil, and sugar cane with husk. Now if company sells husk and brain oil to other consumers, they will generate extra revenue by adopting this by-product pricing.
Product Bundle Pricing
This is a common price and selling strategy adopted by many companies. Many companies offer several products together this is called a bundle. Companies offer the bundles at the reduced price. This strategy helps many companies to increase sales, and to get rid of the unused products. This bundle pricing strategy also attracts the price conscious consumer. Best example is anchor toothpaste with brush at offered lower prices