Captive products are strategically used to maximize revenue. Sellers generally follow a product-mix pricing strategy when pricing captive products. Low price are offered for the core product, but high prices are placed on captive products.

Why do companies use captive product pricing?

Captive product pricing is the pricing of products that have both a “core product” and a number of “accessory products.” It's a pricing strategy that takes advantage of a product that will be used primarily to attract a large volume of customers.

What is an example of captive pricing?

Captive pricing happens when an accessory product is necessary to purchase in order to use a core product. Classic examples of this include products like razor blades for razors and toner cartridges for printers. This is also called by-product pricing.