What Is Captive Pricing Strategy?

What is a captive brand?

A captive brand is a brand that is owned and sold exclusively by a retailer without evidence of this relationship..

What is an example of competitive pricing?

Competitive pricing consists of setting the price at the same level as one’s competitors. … For example, a firm needs to price a new coffee maker. The firm’s competitors sell it at $25, and the company considers that the best price for the new coffee maker is $25. It decides to set this very price on their own product.

What are the 5 product mix pricing strategies?

Five product mix pricing situationsProduct line pricing – the products in the product line.Optional product pricing – optional or accessory products.Captive product pricing – complementary products.By-product pricing – by-products.Product bundle pricing – several products.

What is captive product pricing example?

Examples of Captive Product Pricing Razors and razor blades. Printers and ink cartridges. Smartphones and wireless plans.

What is captive product pricing What is this pricing tactic called in the case of services give examples?

p273 Captive product pricing- Setting a price for products that must be used along with a main product, such as blades for a razor and games for a videogame console. Examples are razor blade cartridges, videogames, and printer cartridges.

What do you mean by captive company?

What Is a Captive Insurance Company? A captive insurance company is a wholly-owned subsidiary insurer that provides risk-mitigation services for its parent company or a group of related companies.

What do you mean by skimming pricing?

Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time. … The skimming strategy gets its name from “skimming” successive layers of cream, or customer segments, as prices are lowered over time.

What are the advantages of skimming?

Price Skimming AdvantagesHigher Return on Investment.It Helps Create and Maintain Your Brand Image.It Segments the Market.Early Adopters Help Test New Products.It Only Works if Your Demand Curve is Inelastic.It’s Not a Great Strategy in a Crowded Market.Skimming Attracts Competitors.It Can Infuriate Your Early Adopters.Aug 16, 2020

What is an example of bundle pricing?

Typical examples of bundling include option packages on new automobiles and value meals at restaurants. In a bundle pricing scheme, companies sell the bundle for a lower price than would be charged for items individually.

How do firms that use captive product pricing make up?

How do firms that use captive-product pricing make up for the low prices of their main products? They set high markups on the captive products. They increase the price of the main products. They offer the captive products and main products together at a reasonable price.

What is skimming pricing strategy with example?

Price skimming, also known as skim pricing, is a pricing strategy in which a firm charges a high initial price and then gradually lowers the price to attract more price-sensitive customers. The pricing strategy is usually used by a first mover. The first mover advantage who faces little to no competition.

What are examples of pricing strategies?

7 best pricing strategy examplesPrice skimming. When you use a price skimming strategy, you’re launching a new product or service at a high price point, before gradually lowering your prices over time. … Penetration pricing. … Competitive pricing. … Premium pricing. … Loss leader pricing. … Psychological pricing. … Value pricing.