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Captive Pricing


Captive pricing involves the firm charging a low price for the core product and a high price for accessories and replacement parts. It is called captive pricing because in order for the customer to fully utilise the core product they have no option but to pay the high price charged for accessories and replacement parts for the core product. For example a printer company sells their printer at a very low price. Their customers can use the printer until the ink cartridges run out. When the cartridges run out, customers discover that the replacement cartridges are more expensive than the printer. In order to continue using the printer the consumer has to pay the high price set for the replacement cartridge.

Captive Pricing

Captive Pricing Benefits

Captive pricing allows a firm to maximise profits on the sale of the accessories.

Captive pricing allow the firms to gain market share on the main product.

Captive Pricing Drawbacks

Users of products may get fed up of paying the high prices of the accessories, they may start looking for cheaper alternatives.

The high cost of accessories may impact the brand image of the firm.



Captive pricing allows the organisation to maximise profits. The firm will make a large proportion of sales on the sale of accesories. The pricing strategy is commonly used in the electronics industry and car industry where accessories are marked up


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