Captive pricing

 Compaies that makes products that must be used

along with the main product are using captive
product pricing.
 Captive products are products that are a necessity
for use with other products, often a “host” product.
 Marketers will often set low prices for the host
product and set high markups on the captive
products. Examples of captive pricing are razors,
video game consoles, theme parks, printers etc.
Examples of captive product pricing
Captive Product Host Product

Memory Cards Digital Cameras

Ink Printers

Razor Blades Razors

Lead Mechanical Pencils

Gasoline Automobiles

Discounted Cell Phones Extended Cell Service Contracts

Examples of captive product pricing
Psychological pricing
“A pricing strategy that specializes in
inflicting psychological effects on
consumers.”
It is a marketing strategy based on utilizing
particular pricing techniques to form a
psychological impact on consumers.
For example, a customer may likely to
pay Rs.299 for a pair of a pair of
shoes and may not like to buy the
same pair if it priced at Rs.300
Techniques of psychological pricing are
 Odd pricing: Odd pricing is the most
commonly used pricing technique
in the world. it’s simple mind illusion.
For example: a price of Rs.499 is
used instead of a rounded price of Rs.500.
This creates a powerful difference
between its real value and its perceived
value and therefore boosts up sales.
 Prestige pricing: Prestige pricing is the opposite
version of odd pricing, as the aim of this strategy
is to price its products at a rounded number point
say $100 instead of making it look cheap at $99.99.
By doing so not only contributes to maintaining
brand reputation but in fact, encourages more purchases.
 Buy One, Get One Free: This is one of the most
popularly used pricing technique in the world.
It is a pricing tactic which involves customers
paying full price for one item and getting another
for free.

 Product Bundle Pricing:

“Combining several products and offering the
bundle at a reduced price.” For example: McDonalds
offer a combo pack includes Medium coke, Medium
fries, The chosen burger. This is more price-effective
for the consumers compared to buying each of the item
individually. Obviously, the company would earn more
money this way from 3 items than to earn from 1 item alone.
 Comparative Pricing:
A marketing technique in which the price of one
offer is directly contrasted with the price of another
offer in the same opening of offers.
For example, a person walks into the clothing
department and buys a suit. The sales assistant offers
him a Rs.700 coat and another even more luxurious
coat for $800.