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- This topic has 5 replies, 2 voices, and was last updated 8 years ago by John Moffat.
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- May 28, 2015 at 11:59 pm #250034
What is the difference between product line pricing and complimentary pricing?
I have watched your lecture with the example of razors – cheap (loss making) handles with expensive blades that need to be replaced. I understand that this is complimentary pricing?
May 29, 2015 at 10:37 am #250128They are almost the same thing.
However, strictly the razors example is complimentary pricing.
To try and explain product-line pricing, Apple have introduced the Apple Watch. However, there are different models of the same watch – some sold at a lower price, and some sold at a higher price. They can justify selling some models at a higher price because they have maybe better screens or better straps or bigger memories. So it is where there are several different models of the same product, which are sold at different prices.
May 29, 2015 at 8:48 pm #250350Ok, thanks for the explanation. In some notes that I have it says:
Product-line pricing – prices reflect cost proportions or demand relationships
Can you please let me know if this is right and what it means?
May 30, 2015 at 9:01 am #250443It is a fancy way of writing what I wrote in my example before.
The price for each model of watch depends on the costs involved and the effect of the price on the demand for each model.
May 30, 2015 at 11:23 am #250505Ok, I like your example better.
Thank you
May 30, 2015 at 2:27 pm #250606You are welcome 🙂
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