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Captive Product Pricing

 

DisciplinesMarketing > Pricing > Captive Product Pricing

Description | Example | Discussion | See also

 

Description

When you have a captive market, you can increase prices to 'what the market will bear'.

Captive markets include:

  • Where you have an effective monopoly with no serious competitors within your target marketplace.
  • Where the main product is bought and you are selling add-ons, service, etc.
  • Where governments, large markets, etc. have approved you as a 'standard supplier' and where you have no serious competition for what you sell to them.
  • Where customers are particularly loyal and not very price-sensitive.

When doing this, beware of alienating customers by being too greedy. Especially when their purchase cycle for base goods is relatively frequent, you can lose all of their custom as they seek to reduce the overall cost of ownership.

Example

A kitchen mixer company sells spares for relatively high prices.

A printer manufacturer sells the printer for a low price in order to capture the market and then sells print cartridges for a higher price.

A strong-branded fashion house with an 'exclusive' image sells their goods for a high price to afficionados who are not price sensitive.

Discussion

The principle of the captive market is first to capture customers and then to 'milk' them for as much as you can successfully achieve. This can be helped with strong marketing and advertising, where the value of products and add-ons are emphasized (such as the razor manufacturer who markets their blades as being particularly sharp).

A classic approach for captive markets is what is called the 'Razor and blades' strategy, where the basic razor is sold for a low cost, and the regular purchase of blades is where all the profit is made.

See also

Brand Pricing

 

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Site Menu

| Home | Top | Quick Links | Settings |

Main sections: | Disciplines | Techniques | Principles | Explanations | Theories |

Other sections: | Blog! | Quotes | Guest articles | Analysis | Books | Help |

More pages: | Contact | Caveat | About | Students | Webmasters | Awards | Guestbook | Feedback | Sitemap | Changes |

Settings: | Computer layout | Mobile layout | Small font | Medium font | Large font | Translate |

 

 

Please help and share:

 

Quick links

Disciplines

* Argument
* Brand management
* Change Management
* Coaching
* Communication
* Counseling
* Game Design
* Human Resources
* Job-finding
* Leadership
* Marketing
* Politics
* Propaganda
* Rhetoric
* Negotiation
* Psychoanalysis
* Sales
* Sociology
* Storytelling
* Teaching
* Warfare
* Workplace design

Techniques

* Assertiveness
* Body language
* Change techniques
* Closing techniques
* Conversation
* Confidence tricks
* Conversion
* Creative techniques
* General techniques
* Happiness
* Hypnotism
* Interrogation
* Language
* Listening
* Negotiation tactics
* Objection handling
* Propaganda
* Problem-solving
* Public speaking
* Questioning
* Using repetition
* Resisting persuasion
* Self-development
* Sequential requests
* Storytelling
* Stress Management
* Tipping
* Using humor
* Willpower

Principles

+ Principles

Explanations

* Behaviors
* Beliefs
* Brain stuff
* Conditioning
* Coping Mechanisms
* Critical Theory
* Culture
* Decisions
* Emotions
* Evolution
* Gender
* Games
* Groups
* Habit
* Identity
* Learning
* Meaning
* Memory
* Motivation
* Models
* Needs
* Personality
* Power
* Preferences
* Research
* Relationships
* SIFT Model
* Social Research
* Stress
* Trust
* Values

Theories

* Alphabetic list
* Theory types

And

About
Guest Articles
Blog!
Books
Changes
Contact
Guestbook
Quotes
Students
Webmasters

 

| Home | Top | Menu | Quick Links |

© Changing Works 2002-
Massive Content — Maximum Speed