these leftover products may not be as valuable as the main product, but they too have some economic value. thus, these leftover products, known as by-products can be sold off as independent products in the market. thus, a sale of a by-product can be beneficial to the business if that is priced correctly and at optimum levels by the business. it is produced during the production process of the main product. to sell it in the market, some processing may be done on it, if required. thus, it is manufactured and sold at almost no cost. these pricing strategies need to be referred so that we can understand pricing later on. there is no compulsion on the customer to purchase these but buying them from the manufacturer provides one excellent, seamless product package. thus, the company has to price these accessories at attractive, competitive prices so that the customer can’t resist the offer. to maintain the performance of the printer, it is advisable that the customer uses the printing ink from the same manufacturer.
so, the manufacturer can afford to price the ink at premium levels as his customer base is almost guaranteed. a crude oil refinery extracts at the end of its refining process. thus, knowing the commercial importance, the company can actually sell it at lucrative prices. here, if the resulting product can be sold at some value in the market but that value isn’t too significant as compared to the revenues from the main product; the company should still sell it in the market at competitive prices. hence, it needs to be recorded under the head ‘other incomes and gains’ and these proceeds can be used to pay off some expenses, lower the sale price of the main product and strengthen the company’s competitive advantage in the market. here, it doesn’t have any value in the market. so here, the company has to incur those expenses in waste disposal as per the legal requirements and write-off these expenses in the regular profit and loss account. this is because fixing optimum rice levels for the by-products ensures the company of an additional revenue stream at no additional cost and these proceeds can be wisely used to lower the sale price of the main product which will help the company gain more market share in the long run. i love writing about the latest in marketing & advertising. let’s stay in touch 🙂
we will explain the basic product mix pricing strategies that change a product’s pricing when it is part of a product mix. in fact, when you buy the razor, you are a captive customer for the products the brand makes the real money with – the higher-margin replacement cartridges. therefore, the strategy for setting a product’s price often has to be changed when the product is part of a product mix. since the various products in the mix have related demand and costs, but face different degrees of competition, pricing is difficult. thus, in product line pricing, the firm must determine the price steps between various products in a product line based on cost differences between the products, competitors’ prices, and, most importantly, customer perceptions of the value of different features. optional product pricing is the pricing of optional or accessory products along with a main product.
we speak of captive product pricing when companies make product that must be used along with the main product. captive product pricing is an extremely powerful strategy in the set of product mix pricing strategies. the difficulty is in finding the right balance between the main product and captive product prices. but by using by-product pricing, the company tries to find a market for these by-products to help offset the costs of disposing of them and make the price of the main product more competitive. the last one of the product mix pricing strategies is product bundle pricing. you see that setting the prices for a product becomes harder when it is part of a product mix – because all products and their prices must be interrelated.
leftover products, known as by-products can be sold off as independent products in the market. examples for captive product pricing are razor blade cartridges and printer cartridges. captive product pricing is an market skimming. 13. product mix pricing strategies. examples of by- products from the food & drink manufacturing, product bundle pricing example, product bundle pricing example, optional product pricing example, captive product pricing example, product line pricing example. example of by product pricing : when meat is processed for human consumption, the by product can be used as food for dog/cat. so the manufacturer can sell it in market to recover some of his expenses say transportation and storage costs.
are you a market leader with a differentiated product like any pricing strategy, development takes time and resources. then, sending it to market requires a a good product line pricing strategy will allow you to market to different customer types, as well as anchor your products.,
When you search for the by product pricing example marketing, you may look for related areas such as product bundle pricing example, optional product pricing example, captive product pricing example, product line pricing example. what is an example of a byproduct? how do you price a product in marketing? what is an example of product line pricing? what do you mean by product pricing?