Product-mix pricing can involve a number of pricing strategies for the brand manager. List each of these strategies and briefly define each.
Answer: There are six situations involving product-mix pricing: (1) product-line pricing—low-, medium-, and high-priced products within the same line, such as differently priced ties; (2) optional-feature pricing—charging for "extra" features, such as leather seats in a car; (3) Captive-product pricing—when the "user" has no choice but to use the high-priced "disposable" products that make the entire product work (for example, ink cartridges for printers); (4) two-part pricing—consisting of a fixed fee and a variable usage fee (cell phone usage); (5) by-product pricing—the price of the by-products of goods being used for other purposes (oil refining for example); and (6) product-bundling pricing—pure bundling when the firm offers its products only as a bundle, or mixed bundling when the firm offers its products as a "bundle" and/or individually.