Question

Individuals can choose to purchase Microsoft stand-alone software packages, such as the Home and Student versions of Word, Excel, and PowerPoint, for $119.99 each. However, they may choose to purchase the Office Home and Student suite, which has all of these applications in the same package, for a price of $149.99. Microsoft is using a __________ pricing strategy.
A) penetration
B) prestige
C) bundle
D) odd-even
E) standard mark-up

Answer 1

Answer: C) bundle

Explanation:

Bundle pricing is a practice by companies where they sell individual products bundled together at a lower price than a customer would have had to pay if they had bought the products individually which is what Microsoft is doing in this scenario.

This strategy is used by companies to increase profits because it inspires customers to spend more than they would have as they would think that they are making savings.