Why is Multiple-Unit Pricing Used?
Multiple-unit pricing has so many uses. Marketers use multiple-unit pricing to get benefits from multiple units sold at increased numbers. It shows customers that they are getting more units at lower prices, whereas the marketers are trying to sell more units.
Can use this multiple-unit pricing on those products which are not easily sold due to many reasons. Hence, marketers plan to sell those units at a lower price to attract customers to buy those units. The goods which are not popular in the market can get many customers through this pricing strategy.
Also, if the marketer has an excess stock of some products and is not selling at a good speed, then the marketer can use multiple-unit selling to sell off the whole stock in the market. Due to this strategy, many customers will purchase those units, and if they like the product, they may buy it again.
Multiple-unit pricing has become a way of selling more units, attracting more customers, and reducing a heap of inventory in the stock.
When should Multiple-Unit Pricing Use?
Should use Multiple-unit pricing in the following situations;
Multiple-unit pricing should be used in customized deals. When there are customized deals and group orders, the customer expects a lower price which is better for him/her.
When an organization is looking to increase its share, they use multiple-unit pricing to do the same. When they price the product on a multiple-unit pricing basis, the customers will start purchasing the product. This will increase the sale and also the share of an existing product.
When a company wants to launch a new product, they use multiple-unit pricing to increase its sales among customers. It will create product awareness, and people would start knowing about the new product. It will also raise competition in the market.
Pros and Cons of Multiple Pricing
Every strategy has its own positive and negative impact; similarly, multiple-unit pricing has pros and cons, which are given under;
Pros – It helps in the fast consumption of stocks of an organization in the form of more sales. It gives a better deal to customers that reduce prices of the units. Multiple-unit pricing helps the new product to have a customer base through lucrative prices. Marketers can sell more products through multiple-unit pricing. They get more customers for their product.
Cons – There is no doubt that this strategy reduces the profit margins of the products. An organization faces low-profit issues using multiple pricing. A middleman also faces a reduced profit margin. Multiple-unit pricing makes it hard to be recorded in the accounting books. A lot of time, a customer also faces defective products under multiple-unit pricing because marketers sell them with the motive of exhausting the stock.
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