Versioning
Definition of 'Versioning'A business practice in which a company produces different models of the same product, and then charges different prices for each model. Versioning a product gives the consumer the option of purchasing a higher valued model for more money or a lower valued model for less money. In this way, the business is attempting to attract higher prices based on the value a customer perceives.Also known as "quality discrimination". |
|
Investopedia explains 'Versioning'This is usually done when a product has large fixed costs of production and small variable costs. For example, in software packages, features are added or taken away to give different versions and price points. Having different options will accommodate different utilities of the consumers. It is based on the willingness to pay of the customer; a higher willingness to pay will result in the purchase of the higher quality product, and a lower willingness to pay will result in the purchase of the lower quality product. |
Related Definitions
Articles Of Interest
-
A Practical Look At Microeconomics
Learn how individual decision-making turns the gears of our economy. -
2 Key Tactics Retailers Use To Increase Sales
Many companies use versioning and bundling to increase sales. These strategies can offer value to consumers, but they also mean higher costs. -
How Influential Economists Changed Our History
Find out how these five groundbreaking thinkers laid our financial foundations. -
Hidden Costs Of Product Rebates
These cash incentives lure in consumers, who are often unable to collect on the deal. -
10 Breakout Ideas For Small Businesses
If your business has hit a wall, we've got the answer to break through and increase sales and earnings. -
Consumer Confidence: A Killer Statistic
It's the key to any market economy, so investors need to learn the measures and how to analyze them. -
Cost-Push Inflation Versus Demand-Pull Inflation
Gain a deeper understanding of aggregate supply and demand, forces which raise the price of goods and services. -
Basic Investment Objectives
You might know about different asset types, but do you know how each type contributes to a particular goal? -
Steps For Adding New Services To Your Finance Business
Advisors who seek to add additional lines of business to their practices need to carefully consider all the factors involved. -
How To Keep Your Small Business Afloat During Hard Times
If an economic storm has your business taking on water, we have some tips for bailing yourself out.
Free Annual Reports