Captive Pricing

The video tutorial discusses the concept of captive pricing, a strategy where the initial product is sold at a low cost, but the accessories or necessary components are priced higher. This method is exemplified by printers and ink cartridges, where the printer is affordable, but the ink refills are costly. The tutorial is part of a broader discussion on the Four Ps of marketing, focusing on pricing strategies.

Which of the following is one of the four Ps in marketing?

• Product

• Placement

• Promotion

• Pricing

What is the main characteristic of captive pricing?

• Discounted pricing for bulk purchases

• Consistent pricing throughout

• Low initial cost, high ongoing cost

• High initial cost, low ongoing cost

In captive pricing, what typically represents the higher revenue flow?

• The accessories or additional products

• The initial purchase

• The discounted items

• The core product

Which of the following is an example of captive pricing?

• Buying a car and paying for fuel

• Purchasing a smartphone and paying for apps

• Buying a printer and purchasing ink cartridges

• Subscribing to a magazine and receiving issues

Why might a printer be considered inexpensive in a captive pricing model?

• Because it is often on sale

• Because it is a high-demand product

• Because it comes with free accessories

• Because the initial purchase price is low