6.8:
Pricing Tactics II
Businesses enhance sales by using various pricing tactics.
The first tactic is Rebate pricing, where customers are offered a partial refund after purchase to incentivize future transactions. For example, a company might offer a 50-dollar rebate exclusively for customers purchasing appliances worth 300 dollars.
Next is Lease or Rentals, which allows consumers to use a product temporarily without buying it. For example, cities provide bike rentals for hourly rates.
Then, there is Price Bundling, where multiple products are sold together at a price lower than when bought separately, like "value meals" offered by McDonald's.
Another tactic is Leader Pricing, where some products are sold below market rates to attract customers into buying other profitable items.
For example, supermarkets discount staples like bread, enticing customers to purchase butter and eggs that are priced higher.
Last is Price lining, in which different versions of the same product are released simultaneously at varying prices, catering to a broader market.
Apple selling different versions of iPhones like SE 2, 15, 15 Pro, and 15 Pro max at different price points exemplifies this.
6.8 Pricing Tactics II
Some more pricing tactics include the following.
- Rebate Pricing involves offering customers a partial refund after they have purchased a product and completed an additional step, like mailing in a coupon or form. Rebates incentivize sales by lowering the net price.
- Lease or Rentals make products or services more accessible to consumers. Instead of selling a product outright, companies can lease or rent it for a periodic fee—for example, car rentals.
- Price bundling is where businesses sell multiple products together at a lower price than if bought separately to boost sales volume and help sell slower-moving items. Examples include software packages or fast-food combo meals.
- Leader Pricing involves selling a product at a lower price – even at a loss – to attract customers who will buy other, more profitable items. Like in grocery stores, staple items are priced low to attract shoppers.
- Price Lining is where companies set a limited number of price points for a product line, each representing a different level of features or quality, helping the company segment its markets such as budget, mid-range, and luxury options.
Each tactic serves a specific purpose depending on the company's goals, the nature of the product, and customer behavior.