A strategy where a company offers a range of related goods at different price points is a common pricing approach. The intention is to create perceived value steps in the customer’s mind, allowing them to choose a product that aligns with their needs and budget. For example, a software company might offer a basic version of its product at a lower price, a standard version with more features at a mid-range price, and a premium version with all features and additional support at a higher price.
This method allows businesses to target multiple customer segments with varying willingness to pay. It can increase overall profitability by capturing a broader market share than if a single price point were used. Historically, this approach emerged alongside the development of mass production and marketing techniques, enabling companies to create and promote differentiated product offerings to meet diverse consumer demands. The effective application of this strategy can enhance brand perception and foster customer loyalty by providing options that cater to evolving requirements.
