Complementary Product Pricing

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Complementary Product Pricing?

Complementary Product pricing is a method in which one of the products is priced to maximize the sales volume and which in turn stimulates the demand of other product.


One product is priced low, just to cover the costs with little or no profit margin while the other product is priced high with a very high profit margin. Both the products are complementary products i.e use of one product is complemented by the other. This strategy is basically followed to overcome the loss due to product’s sale by the profit provided by the sales of the other complementary product.


For example Printer & cartridge. This strategy is successful because once you have bought a printer; you are required to buy the complementary cartridge unless you are willing to buy in a new printer itself. Also, Companies avoid competitors selling ink for their printers by having unique cartridges.

 

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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