# Pricing strategies of micro-Economics (II): pricing and bundled sales

Source: Internet
Author: User

In addition to price discrimination, sellers also come up with various tricks to squeeze every penny of money from consumers. A seemingly unrelated pricing strategy is called "two-part pricing ". There are a wide range of prices in amusement parks, bars, and other places, that is, before consumers consume, they must spend a certain amount of "admission fee" at a time ", after admission, you can pay for the items you consumed at the unit price. Why do sellers divide the cost into two layers? In fact, the fundamental goal is to make more money from consumers.
To explain why the two parts of the price can earn more, we may take the amusement park as an example. For simplicity, we assume that there is only one amusement park project, for example, a roller coaster. There is only one purpose for a person to go to an amusement park. However, old roller coasters are boring. As the number of playings increases, visitors will gradually experience less "refreshing, specifically, taking the nth roller coaster can only bring him the equivalent of-yuan (that is, the highest price he is willing to pay for the nth ride ). Let's assume that the cost of running a roller coaster is an average of 60 RMB per person-time. So how should amusement parks be priced to earn the most from consumers?

First of all, we have noticed that traditional pricing strategies still have shortcomings that have been discussed earlier-in any case, we cannot earn the full amount that consumers are willing to pay. For example, if the price is set to P, the consumer is only willing to play Q-times a roller coaster (if they play again, the benefits will not be paid back ), what he needs to pay is the amount represented by Area A + C in the figure. Area C is the cost of running the Q-times roller coaster. Therefore, merchants can only earn one area. In fact, in order to ride this Q-a roller coaster, the price that consumers are willing to pay is the area A + C plus a small triangle F above, how can f be cheaper for consumers? As a result, the merchant thought, why not make the small triangle area a one-time income in the form of "tickets?
As a result, we have a new way to charge fees: the price of a roller coaster is still P, but no matter how many times you sit, you need to pay as much money as F in advance as a ticket. In this way, the total price you pay is the area A + C + F, excluding the cost C, the part that merchants earn is the area a + F. This is an extra area of triangle F than the previous pricing method.

However, this method is still not the best. In order to continue to earn the area on the Right of Area A, merchants can also reduce the price of the roller coaster and let consumers sit on the roller coaster several more times. The best two-part pricing scheme is to set the price of the roller coaster to the same as the cost, and then directly charge the fare for the entire large triangle area F' above the cost line. In this way, consumers are willing to ride Q 'roller coasters and pay a total of f' + C' money. Apart from the cost, merchants will earn F' net profit. In theory, the consumers will be squeezed to the net.
If you observe carefully, you will find that there are still many examples of the two-part pricing in your life. Membership membership dues, credit card annual fees, and mobile phone monthly rental fees are two typical examples of pricing.

Another common pricing technique is bundling sales. For example, when purchasing a TV channel, you will find that many TV channels are not sold separately and must be bought together with other channels. This is a bit strange: Why don't we simply order a price for each channel as needed, and we have to design so many channel packages at full cost? Will package and sell more? In fact, this is true-binding sales will make sellers more profitable. The motive for all the strange behaviors of sellers is the only one-making as much money as possible.
To explain this phenomenon, let's start with the simplest situation. Assume there are two channels, Channel A and channel B. A is willing to purchase channel A for 120 yuan, and is willing to purchase channel B for 30 yuan; B is willing to purchase channel A for 100 yuan, but is willing to purchase channel B for 40 yuan. If two channels A and B are priced separately, it is obvious that Channel A should be priced at 100 yuan, and channel B should be priced at 30 yuan. At this time, the merchant's revenue is 260 yuan. However, if Channel A and channel B are bundled for sale together, the price of the package can be set to 140 yuan, which can make the merchant earn 280 yuan. It can be seen that bundled sales can bring more profits to sellers.
However, bundled sales are not always effective. If the above data is slightly changed, A's valuation of the two channels is 120 and 40, and B's valuation of the two channels is 100 and 30, respectively, there is no difference between separate pricing and bundled sales. From this we can see that not just bundling two things can bring more profits to sellers, but there are some hidden conditions.
Observe carefully and you will find that the core issue is: If bundled sales can make more profits for sellers, it must be the case that the lowest prices for these channels come from different buyers, that is, the buyer's evaluation of the channel cannot be "both good" or "both bad", and the evaluation of the two channels is negatively correlated. In other words, for a series of products, if consumers prefer only one of them, and different people prefer different products, bundled sales can bring more profits. The most typical example is Microsoft Office suite-why do we need to sell Word, Excel, and PowerPoint separately? The reason is that a common consumer does not use all the software in it. Different people have different comments on the software. Although many people think that word is the most commonly used, financial personnel think that excel is more useful, while teachers think that PowerPoint is more valuable. In this case, bundled sales will allow sellers to make more money. Chongqing digital TV's special program package includes eight channels: doxtv, world geography, discovery tour, first theater, Fengyun music, English tutoring, Fengyun football, and old stories. The channel has a wide coverage, these conditions are basically met. The color and style of tickets for theaters and amusement parks are different, but they are sold separately.

Using these basic mathematical knowledge, we can draw many other pricing schemes to explain various interesting economic phenomena. In fact, economics is not just about economics. It is a way of thinking about problems. It aims to describe people's behaviors with simple mathematical derivation. Later I want to write an equally interesting conclusion about micro-economics-the tragedy of the public. Like the prisoner's dilemma, it is a common phenomenon in daily life. The inspiration it brings is far greater than its own economic significance.

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