Thursday, July 25, 2024
Marketing

Product Line Pricing In Marketing [Procter & Gamble Example]

Are you a marketer looking to increase your product’s profitability? Or perhaps a business owner looking to increase your revenue? Well then, Product line pricing is a strategy that can help you achieve both.

In this article, I will take you into the world of product line pricing, what it is, and how it works.  

What is Product Line Pricing?

Product line pricing is a pricing strategy that involves setting prices for a group of related products within a product line. These products may differ in features, quality, or brand, but they all serve the same purpose.

For example, a car manufacturer may have a product line that includes different models of cars, such as a sedan, a hatchback, and a sports car. Each model may have different features and price points, but they all serve the same purpose of providing transportation.

Why Use Product Line Pricing?

Product line pricing is an effective way to increase revenue and profitability by appealing to different segments of the market. By offering a range of products at different price points, a business can target different groups of customers with different budgets and needs.

For example, a company that sells different models of laptops can appeal to both budget-conscious consumers with a lower-priced option and professionals with a higher-priced option that includes more advanced features.

Benefits of Product Line Pricing

Increased Revenue

By offering a range of products at different price points, a business can increase its revenue by appealing to different segments of the market.

Increased Profitability

When setting different prices for different products, a business can increase its profitability by charging more for products with higher profit margins.

Increased Market Share

By targeting different segments of the market, a business can increase its market share by appealing to a wider range of customers.

Increased Brand Recognition

Also by offering a range of products, a business can increase its brand recognition by reaching a wider audience.

Examples of Product Line Pricing

Apple

Apple is a great example of a company that uses product line pricing. They offer a range of products, including iPhones, iPads, and Macs, at different price points to appeal to different segments of the market.

Ford

Ford is another example of a company that uses product line pricing. They offer a range of cars, including sedans, hatchbacks, and sports cars, at different price points to appeal to different segments of the market.

Nestle

Nestle is a company that uses product line pricing for its chocolate bars. They offer a range of chocolate bars at different price points, from budget-friendly options to premium options.

Product Line Pricing by Procter & Gamble

Another real life example of a company that uses product line pricing is Procter & Gamble (P&G). P&G is a consumer goods company that produces a wide range of products, including household cleaning products, personal care products, and baby care products.

One of their product lines is the “Tide” laundry detergent. Within the Tide product line, P&G offers several different types of laundry detergent at different price points. 

They have the original Tide laundry detergent, which is their most basic and affordable option. They also have Tide Plus, which is a more premium option that includes additional features such as stain-fighting enzymes. 

They also have Tide Pods, which are single-use laundry detergent packets that are more expensive than the liquid detergent.

By offering a range of laundry detergents at different price points, P&G is able to appeal to different segments of the market. 

Budget-conscious consumers can choose the original Tide, while those who are willing to spend more for additional features can choose Tide Plus. And for those who want the convenience of single-use packets, they can choose Tide Pods.

This way P&G is able to increase its revenue and profitability by appealing to different segments of the market. They also increase its market share by reaching a wider audience and increase its brand recognition by having different products under the same brand name.

Wrapping Things Up!

Product line pricing is a very powerful pricing strategy that can help businesses in numerous ways especially when it comes to getting more sales.

Next time you’re thinking about pricing your products, consider using product line pricing as a way to boost your business. With the right pricing strategy, the sky’s the limit!!

Also read:

Rapid Penetration Strategy

Rapid Price Skimming Strategy

Value Based Pricing In Marketing

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