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Odd-even Pricing, Prestige Pricing, Price Bundling, and Captive Pricing

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Please explain these four concepts a little more in depth: odd-even pricing, prestige pricing, price bundling, and captive pricing. Give an example of each. Also, are there any new products that are marketing with a penetration or a skimming approach?

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The expert explains the four concepts of a little more in depth. The marketing with a penetration or a skimming approach is given.

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PRICING CONCEPTS
ODD-EVEN PRICING
An online source noted that odd-even pricing is a psychological pricing tactic that holds an assumption that the numerical value has an effect on the buyer's perception of product's value. As such, instead of charging an exact amount of $20, the product is priced at $19.95 or $49.95 instead of $50. Odd pricing refers to making use of price ending in odd numbers such as 1, 3, 5, 7, or 9. Hence the prices may be $4.93, $19.97, 03 $99.95. Even pricing refers to price ending in even number such as $4.50, $98.00, or $80.00 (http://www.priceintelligently.com/odd-even-pricing/).
The prices such as $19.95 would create an impression that the product is priced below $20 while the product priced at $49.95 appears to be priced lower than $50 creating a psychological effect that the product are low priced and are affordable. Odd pricing is often more commonly used than even pricing.

CAPTIVE PRICING STRATEGY
Another online source noted that captive pricing is a strategy that aims to hold or maintain existing buyers. The company comes up with a strategy so that a buyer who had an initial purchase would be constrained to purchase future items
Captive strategies comprise any kind of marketing and sales strategy whereby the customer, having made an initial purchase or decision, is constrained to purchase future items only from the ...

Solution provided by:
Elisa Valdez, PhD
Education
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
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