What is Captive Pricing?

cap - tive price- ing

noun

Is a strategy that involves giving a lower price to a base product and increasing the price of products called captive products. Captive products are those that are essential for a base product to work. The strategy of this is to drive shoppers into buying a lower priced product, with the necessary step of purchasing the captive product in order to achieve their ultimate objective. This type of concept can help companies boost revenue, but merchants should be careful when deciding whether to go this route as it can backfire and result in customer frustration and ultimately churn.