5 Questions
What is the primary goal of the pricing strategy used in the Evernote book?
To lock in customers
What is the characteristic of the pricing strategy used in the Evernote book?
Low initial price
What type of pricing objective is demonstrated by the Evernote book's pricing strategy?
Captive pricing
What is the effect of the pricing strategy used in the Evernote book on the customer?
Creates a sense of lock-in
What is the pricing strategy used in the Evernote book also known as?
Razor-Razorblade model
Study Notes
Pricing Objective Example
- The Evernote book has a unique feature of magnetic detachable paper.
- Ben purchased an Evernote book for $42.
- When the paper was depleted, Ben bought a refill for $15.
- This scenario illustrates an example of Captive pricing, a pricing strategy where the initial product is sold at a competitive price, and subsequent refills or accessories are sold at a higher price, thereby generating more profit.
Identify the pricing objective represented in the scenario where Ben buys a notebook and a refill. Is it maximum current profit, captive pricing, survival pricing, or market penetration?
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
