Purchase Price

Offering price discounts is one of the most popular ways to customize prices. Criteria for discounting often include a customer's sales volume, sales history (such as being loyal or not), and time of purchase. High-volume customers may get special discounts, users of old product versions may get discounts on new product versions, and so on. Another way to customize prices is by customizing the product, with additional product options leading to higher prices.

Product bundling allows firms to customize prices as well. A distinction should be made, however, between pure bundling, in which products can only be bought bundled, and mixed bundling, in which they can be bought separately or together. Various price policies can be pursued in the case of mixed bundling. One product might be discounted if another is bought; this is called mixed leader bundling. Or a favorable price might be set for a package of products, which is known as mixed joint bundling.

Purchase price may also be considered a customizable marketing mix instrument to be manipulated by the customers themselves--again, often as a result of customizing the product. Customers may design a final product, such as when they select components from a menu, so that the total price does not exceed their budget. Chrysler allows its potential customers to design their favorite car, selecting options through a special design section on the company's Web site that automatically calculates the price of the auto using those specifications. Self-checkout systems in supermarkets are letting customers monitor the total price of their purchases as they go along.

Of course, purchase price may be only partly customizable in some markets, especially in business-to-business sales, because of a dependence on customers' bargaining power. And to some extent customers may control purchase price over time by choosing the right moment to buy a new product or waiting until its price has dropped. When a manufacturer such as Chrysler provides product information on its Web site, customers may be more prepared and knowledgeable when they visit a dealer. And with new software being developed, such as Netscape's "Constellation," customers can obtain ever more customized information.