Have you ever wondered why the world cup album is so cheap or zero price? The pricing model used here is pretty close to the model of razor-blades, printer-cartridges, console-games, cinema-foods, etc. In this model the main profits will come from the tied products. In this example the profits will come from the stickers.
The idea behind this pricing strategy is to engage as much as possible album buyers to increase the chance of future sticker sales.
Using Excel modeling and solver GRG, I was able to optimize the pricing strategy from the album and its stickers sales.
Doing a quick market sizing and assuming some elasticity I built a demand curve for the album. Running Excel solver to find the optimal price of the album I got that the best price is zero. Using this price I got negative profits from album but very large positive profits from sales of sticker package. Here in the picture you can find the assumptions and the solutions.
World Cup Album Pricing Strategy
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