Examples & Case Studies of Pricing Tactics

Examples and detailed case studies of advanced pricing strategies being used in the real world.

Bundled Pricing at the Movies

Movie theater snack combos provide interesting real-world examples of both pure and mixed bundling.

Unbundling and the Entitlement Trap

Airline baggage fees offer incredible value to those that travel with more luggage without passing any of the associated costs onto those that don’t check bags. Why does everybody hate them?

Boxing Day Sales

A surprising real world example where identical products are offered for every different prices just feet from each other in the same store.

Volume Premiums

Not every volume buyer is only interested in the total volume. Smart pricing recognizes what each type of buyer values and adjusts accordingly.

The Diminishing Marginal Utility of Fresh Brownies

Diminishing marginal utility, and pricing to account for it, becomes very simple when you think about the enjoyment you get from something like fresh brownies.

Decoy Pricing on Indiegogo

A recent Indiegogo campaign does a great job of using discounting and decoy pricing to increase the number of units sold.

Virtual Haggling Over a Hotel Suite

Everyone expects a car dealer to make offers and counteroffers as they read your responses. The same thing now happens online when booking a hotel room.

Differential Pricing Example – DVDs

Popular movies are released on digital media in a bewildering number of versions and formats in a great example of differential pricing.

Price Discrimination vs Differential Pricing

The terms Price Discrimination and Differential Pricing are sometimes used interchangeably, and there can be some overlap, but there are some important differences as well.

Decoy Pricing on Daily Newspapers

The Economist magazine might have provided the most famous example of decoy pricing but there are other examples in publishing.

Anchoring On Price Tags

The price tags on sale items often use anchoring very effectively by including the higher regular price alongside the discounted sale price.

Competing To Be The Most Expensive

What would worry you more – a competitor that charged less or a competitor that charged a lot more?

The Diminishing Marginal Utility of Popcorn

Movies theatre popcorn pricing employs some very sophisticated strategies that are worth looking at.

Pricing Fail: In-Room Hotel Internet Access

In-room internet access: Inexpensive hotels give it away. More expensive hotels charge for it but give it away free in the lobby. Is this a sound pricing strategy?

Pricing Opportunity: In-Flight Internet Access

In-flight internet access is a great opportunity for airlines to create new revenue from passengers that put a high value on connectivity.

Same Product, Same Price, Different Pricing Model

A real world example of how different pricing models attract different buyers to the same product at the same total price.

Same Product, Same Store, Different Price

A surprising real world example where identical products are offered for every different prices just feet from each other in the same store.

Cheap Tuesdays – A Self-Propagating Hurdle

Color can be used as a hurdle to identify buyers focussed on price, discount to them exclusively, while not discounting to those less concerned with price.

Using Product Color As A Hurdle To Segment Buyers

Color can be used as a hurdle to identify buyers focussed on price, discount to them exclusively, while not discounting to those less concerned with price.

Raising Prices to Enhance Credibility and Increase Sales

Lower prices don't always mean more sales. Raising prices can be even more effective - adding prestige to your brand and anchor prices to your strategy.

New Customers Through Selective Discounting With Hurdles

Though sometimes discouraged discounting, done selectively using hurdles, can increase sales & profits by motivating new and/or price sensitive buyers.

Price Inelasticity – Examples

Examples of price inelasticity – situations where demand does not change correspondingly to price.

Price Elasticity – Examples

Examples of price elasticity of demand – situations where changes in demand exceed changes in price.

Reverse Price Elasticity – Examples

In special cases the law of demand is reversed, and demand actually increased alongside price. This is referred to as reverse price elasticity (of demand).

The Appeal of Bundles

Combining multiple products for sale at a single price is known as bundling, and it is a powerful way to please customers and increase revenue.