Pricing Product Lines

Question 1

Premium pricing

Answer 1

Offering differentiated products to different consumer segments

Question 2

Image pricing

Answer 2

Offering a higher priced product or service next to a lower priced alternative to signal a more favorable quality or luxury variant

Question 3

Freemium

Answer 3

Basic (digital) offering provided free of charge, but money is charged for extra features

Question 4

Price bundling

Answer 4

Practice selling two or more products as a package at an all includive price that is below the price of the items separately

Question 5

Captive pricing

Answer 5

Used to set price for products that are used together, where price of main product is low but the supplies are expensive

Question 6

Two part tariffs

Answer 6

Price of product or service contains 2 parts: fixed lump sum access fee and per usage or visit charge

Question 7

Loss leadership

Answer 7

Product sold at low price to stimulate shares of other (profitable) products at the store

Question 8

Bait pricing

Answer 8

Communicating an offering at an unrealistically low price as bait to lure customers to the store. Once there, this offer is no longer available and the retailer tries to sell a more expensive alternative