Decision: Multidimensional Prices

Hermann Simon and Martin Fassnacht
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Hermann Simon: Simon-Kucher & Partners Strategy and Marketing Consultants
Martin Fassnacht: WHU – Otto Beisheim School of Management, Chair of Marketing and Commerce

Chapter 6 in Price Management, 2019, pp 209-257 from Springer

Abstract: Abstract One-dimensional pricing, discussed in the preceding chapter, is rather the exception than the rule in economic reality. Companies typically charge different prices for the same product depending on target group, region, time, or purchase volume. This kind of price differentiation requires the setting of multiple prices or price parameters. Almost all companies offer several products, and their sales are often interdependent. Price management needs to take these inter dependencies into account, because they can have strong effects on a product line’s profit. Offering several products in one package, normally at a reduced price, is referred to as price bundling. This method is effective for finer market segmentation and for better exploiting willingness to pay. The optimization of multidimensional prices requires a deeper understanding of interactions and dependencies, and more detailed information, than one-dimensional pricing. This chapter provides the reader with the necessary knowledge.

Date: 2019
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DOI: 10.1007/978-3-319-99456-7_6

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