Upselling: Optional Feature Pricing

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A Kahnesky
Analyst, Denmark
🔥NEW Many companies are offering optional, related products and/or additional features along with the main product. This is called: cross-selling and/or upselling. Optional Feature Pricing (OFP) is the pricing mechanism behind the second one i.e., "upselling" marketing tactics. In upselling strategies the main product often has limited features (offered at a Basic Price) while the optional features, which deliver added value to the customer, cost extra over the Basic Price (usually sold at a premium). Typically, the firm covers the costs through the sale of the Base product and makes more profit through the sale of the additional features. To understand an OFP strategy it's good to start with Philip Kotler's Model with 5 Product Levels. Here, the Basic Product being offered resembles the 'Expected Product' from the Model offering just enough features to satisfy the customer's basic requirements, while also distinguishing itself from the competitors. Each additional feature offered by t (...) Read more? Sign up for free

  Reinaldo Francisco Munguambe
Accountant, Mozambique

Upselling: Optional Feature Pricing

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