MULTIDIMENTIONAL PRICES

CONCEPT
The concept of multidimensional pricing refers to a pricing strategy that considers
multiple dimensions or factors beyond just the cost of production when setting prices
for products or services. Instead of relying solely on a single pricing criterion, such
as production costs or competitor prices, multidimensional pricing takes into account
various factors, such as customer value perception, market demand, segmentation,
and willingness to pay. This approach allows companies to tailor their pricing
strategies to different customer segments, market conditions, and product offerings,
thereby maximizing revenue, profitability, and customer satisfaction.
VALUE-BASED PRICING
Pricing based on the perceived value of the product or service to customers.
Companies assess the benefits, features, and quality of their offerings and set prices
that reflect the value they provide to customers. Value-based pricing allows
companies to capture value in proportion to the benefits received by customers.
Example: High-End Smartphone

Let's consider a high-end smartphone manufacturer that is launching a new flagship

model. The company has invested significantly in research and development to
create a product with cutting-edge features, advanced technology, and superior
design.
SEGMENTED PRICING
based on different customer segments, such as
demographics, psychographics, or buying behavior.
Companies offer different price points or pricing plans
tailored to the specific needs, preferences, and willingness
to pay of each segment. Segmented pricing enables
companies to maximize revenue by targeting different
customer segments with customized pricing strategies.
DYNAMIC PRICING

Varies in real-tie based on changes in market conditions,

demand, and other factors. Companies adjust prices
dynamically using algorithms, data analytics, and market
intelligence to optimize revenue and respond to
fluctuations in supply and demand. Dynamic pricing is
commonly used in industries such as travel, hospitality,
and e-commerce.
e-Commerce
e-Commerce companies are the
major users of dynamic pricing.
-It is much easier to implement
such strategies.
-Easier to obtain data that can
help provide personalized
pricing and rates.
-It can be used for any product
on sale.
BUNDLE PRICING
combines multiple products or services into a single
package or bundle and offers them at a discounted
price compared to purchasing each item separately.
Bundle pricing allows companies to increase sales
volume, encourage upselling, and provide greater
value to customers by offering complementary
products or services together.
BUNDLE PRICING
PRICE DISCRIMINATION
charges different prices to different customers or
market segments based on their willingness to pay,
purchasing power, or price sensitivity. Price
discrimination aims to capture consumer surplus by
extracting higher prices from customers with higher
willingness to pay while offering lower prices to
price-sensitive customers.
Psychological Pricing: Pricing tactics that leverage psychological factors, such as
perception, emotions, and cognitive biases, to influence consumer behavior and
purchasing decisions. Examples include setting prices just below round numbers
(e.g., $9.99 instead of $10) to create the perception of a lower price or using decoy
pricing to steer customers towards certain options.

Time-Based Pricing: Pricing that varies based on the time of purchase, such as
seasonal pricing, peak/off-peak pricing, or time-limited promotions. Companies
adjust prices over time to capitalize on seasonal demand, manage capacity
constraints, or stimulate sales during slow periods.

Overall, multidimensional pricing recognizes that pricing decisions are influenced by

a variety of factors, and adopting a flexible, dynamic approach to pricing allows
companies to better respond to market dynamics, customer preferences, and
competitive pressures, ultimately driving revenue growth and profitability.