The phenomenon of having products in a lineup which are never meant to sell is well known to marketers.
The exact name for it escapes me just now.
Basically, the logic goes:
1. Find a feature that is easily differentiable and cheap to create.
2. Differentiate on that feature for a relatively small markup. It'll be almost pure profit.
In software this is easy as a few named constants in your source code or some entries in a database table.
So for example, last time I looked The Economist had three subscription types:
Paper, Digital, Paper & Digital.
They priced the Paper and the Paper & Digital plans identically. Why?
Because the contrast between P/P&D made P&D more attractive. It increases sales of the P&D plan and, overall, improves the total profit on the deal.
There are many other businesses where "sacrificial lambs" are created to sell the outlying plans. As usual I refer folks to The Strategy and Tactics of Pricing for details.
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The phenomenon of having products in a lineup which are never meant to sell is well known to marketers.
The exact name for it escapes me just now.
Basically, the logic goes:
1. Find a feature that is easily differentiable and cheap to create.
2. Differentiate on that feature for a relatively small markup. It'll be almost pure profit.
In software this is easy as a few named constants in your source code or some entries in a database table.
So for example, last time I looked The Economist had three subscription types:
Paper, Digital, Paper & Digital.
They priced the Paper and the Paper & Digital plans identically. Why?
Because the contrast between P/P&D made P&D more attractive. It increases sales of the P&D plan and, overall, improves the total profit on the deal.
There are many other businesses where "sacrificial lambs" are created to sell the outlying plans. As usual I refer folks to The Strategy and Tactics of Pricing for details.