From the razor blade to printer and ink cartridges to mobile phones and regular monthly usage charges to media devices and content, razor-and-blades pricing is prevalent. The argument for such a business design is compelling: lure customers to embrace with a low initial cost for the 'razor,' build up a set up base, and more than offset the initial subsidy by charging a high cost for replacement 'blades.'.
The problem is, many customer enticement, customer lock-in, and competitive lock-out mechanisms look less and less tenable provided modern-day developments such as the Web, Google searches, social networks, the hacker transformation, the 'maker movement,' rapidly improving innovation, dripping supply chains, and worldwide markets. This short article identifies the exactly what, why, and how of razor-and-blades pricing; then analyzes the contemporary tenability of such a pricing practice; and concludes with an inspiration and a require innovation-innovation in, perhaps, the pricing of and the purchasing arrangement for the preliminary razor; the value proposal from the razor and the razor-and-blades system; the engineer of the razor-and-blades system; and the delivery, especially in terms of consumer experience, of value from the razor-and-blades system.
Razor-and-Blades Pricing Revisited Case Study Solution
PUBLICATION DATE: May 11, 2016 PRODUCT #: BH739-PDF-ENG
This is just an excerpt. This case is about SALES & MARKETING
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