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This question is about what a production assistant does.
What is captive product pricing?
Captive product pricing refers to a specific pricing method that consists of setting a low price for a source product, and then pricing a product or service that is complementary to the source product at a higher price point to cover the losses of the initial source product's low pricing.
The key to captive product pricing is to make the complementary product or service essential for the proper use or enjoyment of the source product. This is done to make consumers beholden to purchases of both products, when they initially buy the source product at a low price.
Captive product pricing is used to attract consumers with the low price of the source product, and then generate maximum profit from the complementary product or service that needs to be bought for the source product to have its full use or potential. Here are two specific examples of captive product pricing strategies:
Computer printers
A company that sells computer printers might set the price of their printer low, and then charge a very high price for ink cartridges that must be replaced regularly for the printer to function properly. Many of these types of companies will also ensure that the cartridges contained in the new printer after purchase are half full or low on ink.
Video games
A video game console manufacturer might use a captive product pricing strategy by selling their video game console at a somewhat low price and then charging a high price on the video games that can only be played on that particular video game console.
Companies that utilize this strategy must ensure that they carefully balance the prices of their source products and complementary product or service to achieve the optimal consumer purchasing effect.
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